The first aim of this paper is to establish the Essential Facilities Doctrine’s (EFD) undeniable existence in EC law and to determine how its application has evolved over time by analysing the relevant case law. By outlining the legal theory of the EFD, Part I shows that the Doctrine is a well-established competition law remedy within the refusal to supply framework of Article 82 EC. This paper argues that the EFD should be an exceptional measure, only applied after careful balancing of the dominant undertaking’s freedom of contract and right to property against the potential benefits to consumer welfare. By investigating how the EFD has been applied practically in refusal to supply case law, the second half of Part I identifies the different criteria under which refusal to grant access to an essential facility was deemed to constitute an abuse, and concludes that the circumstances in which the EFD was initially applied were not consistent. It is submitted that it was not until the Bronner Judgment that the EU institutions began applying the EFD to refusal to supply cases within a coherent and sufficiently strict legal framework.
Part II will deal with the second aim of this essay, namely to evaluate the legal evolution of the Doctrine’s controversial application to Intellectual Property Rights (IPRs). Because compulsory licensing of IPRs can have grave negative repercussions on innovation and consumer welfare, this paper maintains that the EFD’s application to IPRs should be exceptional and subject to the strictest of conditions. It accordingly supports the notion that IPRs require special deference in comparison to physical property rights, and notes that the EFD is applied to IPRs under stricter legal standards than when applied to other property rights. The second half of Part II investigates the Doctrine’s application to refusal to licence cases. This paper identifies that there has recently been a significant and regrettable attenuation of the abovementioned stricter standards since the criteria of the exceptional circumstances test under which the EFD results in compulsory licensing have been indefensibly widened following the landmark Microsoft Judgment.
Table of Contents
EC Competition Law
Introduction
Part I: The Essential Facilities Doctrine and EC Law – Origins and Trends in Refusal to Supply Cases
1.1 EFD Lies Within the Refusal to Supply Framework under Article 82 EC
1.2. Evolution of the Application of the EFD in Refusals to Supply Case Law
Part II: The Essential Facilities Doctrine and Intellectual Property Rights – Evolution in Refusal to Licence Cases
2.1. The Interface Between Competition Law and Intellectual Property Law and the Need for Stricter Standards
2.2. Evolution of the Application of the EFD in Refusals to Licence Case Law
Conclusion
Objectives and Key Themes
This paper examines the established existence of the Essential Facilities Doctrine (EFD) within EC competition law, specifically under Article 82 EC. The primary objective is to analyze the historical evolution of the Doctrine's application in refusal to supply cases and to critically evaluate its controversial extension to Intellectual Property Rights (IPRs), assessing how recent jurisprudence has potentially weakened legal standards.
- The role of the EFD within the legal framework of Article 82 EC.
- The transition from inconsistent early case law to the coherent "exceptional circumstances test."
- The tension between competition law and the protection of Intellectual Property Rights.
- Impact of the "new product" criterion and its subsequent attenuation in recent case law.
- Critical analysis of the Microsoft Judgment and its implications for future legal certainty.
Excerpt from the Book
1.2. Evolution of the Application of the EFD in Refusals to Supply Case Law
The EFD has been applied to a wide array of situations under Article 82, ranging from classical leveraging of market power to ancillary markets, to vertical cessation abuses. By investigating key EFD cases this essay identifies that there was originally no coherent nor consistent test for when refusals were considered abusive. In fact, although the general principle of the EFD is clear, the evolution of the EFD has been far from linear and the conditions under which a dominant undertaking was forced to grant mandatory access were initially best described as nebulous.
Commercial Solvents is crucial for the evolution of the EFD as it was the first case in which the EFD was applied. It involved the decision of the dominant undertaking Commercial Solvents – which had a dominant position on the market for raw materials used for the production of ethambutol – to cease its supply of raw material to the company Zoja since it had decided to produce ethambutol itself. Commercial Solvents accordingly entered into competition with its former customer and its decision represented a classical competitive leveraging of dominant market power in the upstream market in order to reserve the downstream market to itself. In Commercial Solvents the Commission made its first explicit statement regarding the epithet of an ‘essential facility’, stating that the owner of such a facility cannot refuse competitors access when it is essential for them to operate on the market, and that to do so constitutes an abuse of EC law.
Summary of Chapters
EC Competition Law: Provides the foundational research questions regarding the application and evolution of the Essential Facilities Doctrine in the European Community.
Introduction: Outlines the dual aims of the paper: establishing the EFD within EC law and evaluating its application to IPRs.
Part I: The Essential Facilities Doctrine and EC Law – Origins and Trends in Refusal to Supply Cases: Analyzes the theoretical framework of the EFD and traces its development through early case law leading up to the Bronner decision.
1.1 EFD Lies Within the Refusal to Supply Framework under Article 82 EC: Explains the nature of the EFD as a tool for enforcing mandatory access for essential infrastructure.
1.2. Evolution of the Application of the EFD in Refusals to Supply Case Law: Documents the inconsistent early application of the Doctrine and the arrival of a stricter legal framework.
Part II: The Essential Facilities Doctrine and Intellectual Property Rights – Evolution in Refusal to Licence Cases: Investigates the complex intersection between competition law and the inherent exclusivity of IPRs.
2.1. The Interface Between Competition Law and Intellectual Property Law and the Need for Stricter Standards: Discusses the necessity of applying high legal thresholds when overriding IP rights through compulsory licensing.
2.2. Evolution of the Application of the EFD in Refusals to Licence Case Law: Critically reviews major judgments like Magill, IMS, and Microsoft, highlighting the recent degradation of legal standards.
Conclusion: Synthesizes findings, concluding that the EFD’s criteria have been regretfully widened, risking legal certainty and the protection of innovation.
Keywords
Essential Facilities Doctrine, Article 82 EC, Competition Law, Refusal to Supply, Intellectual Property Rights, Compulsory Licensing, Exceptional Circumstances Test, Microsoft Judgment, Indispensability, Innovation, Market Leverage, Consumer Welfare, Bronner, Magill, IMS Health.
Frequently Asked Questions
What is the core focus of this research paper?
The paper focuses on the Essential Facilities Doctrine (EFD) in European Community law, specifically how it has developed as a remedy for refusing to supply and how it interacts with Intellectual Property Rights.
What are the primary themes discussed?
The main themes include the definition of essential facilities, the legal balance between freedom of contract and competition law, the protection of innovation, and the evolution of judicial standards for compulsory licensing.
What is the ultimate research objective?
The aim is to determine the extent to which the EFD is established in EC law and to evaluate how the application of the Doctrine to IPRs has evolved, particularly in terms of legal consistency.
Which scientific methodology is employed?
The author employs a legal analysis methodology, specifically investigating and contrasting relevant case law from the European Court of Justice and the Commission to track the evolution of the "exceptional circumstances test."
What does the main body cover?
The main body is divided into two parts: Part I examines the origins and inconsistencies of the EFD in supply refusal cases, while Part II evaluates the controversial application of the Doctrine to intellectual property, focusing on cases like Magill, IMS, and Microsoft.
Which keywords best characterize the work?
Keywords include Essential Facilities Doctrine, Article 82 EC, Competition Law, Compulsory Licensing, Intellectual Property Rights, and the exceptional circumstances test.
How did the Microsoft judgment impact the EFD?
The author argues that the Microsoft judgment significantly lowered the legal standards for the EFD, particularly by shifting from a strict "new product" test to a weaker "technical development" test, which undermines the reliability of IPRs.
What is the "convenient facility" nomenclature mentioned by the author?
This is a critical term used by the author to describe the current state of the EFD, suggesting that because the "indispensability" criteria have been so weakened, the doctrine is now being applied to "convenient" rather than truly "essential" facilities.
- Arbeit zitieren
- Veronica Hagenfeldt (Autor:in), 2009, EC Competition Law - The Essential Facilities Doctrine, München, GRIN Verlag, https://www.hausarbeiten.de/document/169622
