The 1992 EC Commission decision under Article 86 regarding the dispute between B & I Line and Sealink1 is perhaps the first EC competition law case to have made explicit reference to the 'essential facilities' doctrine. This is the doctrine that has been invoked in US anti-trust cases to justify imposing an obligation on a dominant firm to share its assets with its competitors. Some see this development as a fresh and sinister assault on the legitimate property rights of successful firms; others view it as a new and welcome instrument for liberalising markets via imaginative use of the competition rules. Neither view captures the whole truth. In fact, the 'essential facilities' doctrine has been present, in substance if not in name, in both UK and EC competition law for many years. The objective of this article is to provide a nontechnical analysis of the doctrine in theory and in application. The main theme is that the essential facilities doctrine is indeed an assault on the property rights of successful firms, but this does not make it a bad thing per se. Any effective competition policy action will have the effect of reducing or eliminating monopoly rents that a dominant firm or firms would otherwise have enjoyed, and will therefore affect the value of such firms' property rights. However, the over-zealous or inappropriate application of the essential facilities doctrine carries the risk of enormous damage to the system of dynamic incentives to economic efficiency on which economic and technical progress relies. It is therefore vital that a clear analytical framework is adopted when considering essential facilities cases. At present, no such framework exists.
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