Essential Facilities Doctrine in Relation to Incentives to Invest

20 Pages Posted: 29 Dec 2010

See all articles by Michael D. Diathesopoulos

Michael D. Diathesopoulos

University of Cambridge - Faculty of Law; Tilburg Law and Economics Center (TILEC); Leicester Law School

Date Written: December 29, 2010


In this paper we especially focus on the issue of incentives to invest in relation to forced sharing of essential facilities and infrastructure in developing markets, where innovation plays a key role. We evaluate the economic consequences of third party access to the obliged to grant access party and we focus on the relation between these consequences and incentives to invest. We distinguish between short-term and long-term competition as two concepts that form a pair of objectives, which should provide the orientation of any regulation of developing industries. Following this dualistic model, we examine the relevant solutions for an effective combination of these concepts, provided by US and EU antitrust law, such as investment ladders and access holidays. Finally we relate this dualism and the need for relevant combination to the issue of the distinction and combination of sector and competition rules as tools for the effective regulation of developing markets, such as energy.

Keywords: Antitrust Law, Essential Facilities, Essential Facilities Doctrine, Market Definition, Incentives to Invest, Innovation, Long-term Competition, Sector Rules, Energy Law, Internal Energy Market, Competition Law, Market Leveraging

JEL Classification: K2, K20, K21, K23, L1, L4, L40, L41, L42, L43, L44, L49, L5, L50, L51, L9, L90, L94, L95, L96, L97

Suggested Citation

Diathessopoulos, Michail D. and Diathessopoulos, Michail D., Essential Facilities Doctrine in Relation to Incentives to Invest (December 29, 2010). Available at SSRN: or

Michail D. Diathessopoulos (Contact Author)

University of Cambridge - Faculty of Law ( email )

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Cambridge, CB3 9DZ
United Kingdom

Tilburg Law and Economics Center (TILEC) ( email )

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Tilburg, 5000 LE

Leicester Law School ( email )

University Road
Leicester LE1 7RH, LE1 7RH
United Kingdom

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