Build It and You Must Share It? Essential Facilities in Canada

Abstract

The concept behind the essential facilities doctrine is deceptively simple: where a firm owns a facility that is an essential input for firms producing a downstream product, competition law will in certain circumstances force the owner of the upstream facility to share that facility. The difficulty lies in defining what those circumstances are in a way that does not lead to routine forced sharing. If competition law too easily forces owners of facilities to share them with their competitors, it deprives those owners of the fruits of their investment in creating the facility, and weakens, if not eliminates, incentives to develop new facilities. This in turn will reduce innovation and competition. In short, if the rule is "build it and you must share it", then firms will not build.In Canada, the essential facilities doctrine is still in its infancy. While there is broad consensus that access to a facility should only be ordered in exceptional cases, paradoxically, the elements of section 79 of the Competition Act may be easier to meet where the conduct consists of a denial of access or a refusal to deal. Robust limiting principles are therefore required to constrain the ambit of this doctrine.