Introduction

As Margrethe Vestager remarked, “Access to data gives you power. Without access, you’re out of the market.” In today’s digital economy, the ability to compete increasingly depends not on price or product, but on the terms of access to data and digital infrastructure. In this environment, the Essential Facilities Doctrine (“EFD”) is increasingly discussed as a way to constrain dominant platforms that refuse access to critical infrastructure. The Essential Facilities Doctrine involves a situation where a competitor in an upstream market, controls an input that is essential to compete in the downstream market. 

While the doctrine was developed in infrastructure-heavy sectors like rail and telecommunications, it is now being assessed as a way to adjudicate interoperability and data access cases. However, the economic costs of such an approach are high. Unlike traditional utilities, digital platforms evolve quickly, and their inputs, such as user data or algorithms are not fixed, physical bottlenecks. Applying the doctrine to such settings risks poor remedy design, particularly when the authority applying it lacks pricing expertise or sectoral knowledge.

This paper argues that the EFD should be applied only after careful sector-specific screening. It should not serve as a substitute for ex-ante regulation by specialised bodies. The unique economics of digital markets require forward-looking and technically equipped regulation. I specifically examine the role of data, and demonstrate why sector specific regulation always remains preferable in the application of the EFD. In this respect, this paper is divided into three parts. The first part examines the evolution of the EFD across jurisdictions, highlighting its doctrinal constraints. The second part explores the peculiar structural and behavioural challenges presented by digital markets. The third part makes the case for institutional restraint and advocates for a sector-specific regulator over broad reliance on ex-post enforcement by the Competition Commission of India (“CCI”). The paper concludes that regulating digital gatekeepers must be done with both legal precision and institutional foresight, and that this task cannot be left to general competition authorities alone.

(I) Tracing the Evolution and Limits of the Essential Facilities Doctrine

This section examines the historical development and doctrinal boundaries of the EFD in antitrust law. I begin by tracing the doctrine’s origin in the United States and the rationale underlying its limited application. I then analyse the European Union’s more structured approach, particularly the indispensability test articulated in Oscar Bronner. Finally, I consider the position in Indian competition law, showing that although the doctrine is recognised conceptually, it has not yet been operationalised in enforcement under Section 4 of the Competition Act.

The Essential Facilities doctrine first developed in the United States, and then saw adoption by jurisdictions such as the EU in the Commercial Solvents (1974) judgement, and in India through the decision of the CCI in Arshiya Rail.  The EFD examines whether an input is so essential to competition on a specific market, such that its denial would lead to complete foreclosure from such a market. A general duty to deal is incompatible with the notion of freedom to contract, and therefore, the EFD requires exceptional circumstances to exist, so that such a duty may be recognised. 

The first application of this doctrine was in the United States, with the judgement of The United States Supreme court in United States v. Terminal Railroad Association of St. Louis (1912). Herein, the Terminal Company controlled the sole infrastructure for rail transport across the Mississippi River at St. Louis, which served as a vital junction for multiple competing railroads. This infrastructure included the bridge, terminal yards, and key track connections necessary for entering or exiting the city. 

A consortium of railroads acquired control of the facility. This raised concerns that the controlling members could use the terminal to either exclude or disadvantage rival operators. Recognising the risk of anticompetitive foreclosure, the Supreme Court mandated that the controlling members open access to the facility to competing railroads on fair and equal terms. . Herein, the court did not recognise an essential facilities logic, but it did consider the drastic effects of foreclosure that competitors would face, upon being excluded from the combination. 

Ever since Terminal Railroad, the United States has been more hesitant in its application of the Essential facilities doctrine, and the Supreme Court has refused to recognise such a general essential facilities doctrine. The majority opinion in Trinko authored by Justice Scalia went as far to say that “we have never recognized such a doctrine, and we find no need either to recognize it or to repudiate it here”. Therefore, the doctrine hasn’t seen significant application in the United States in the recent past.

The European Comission has been more enthusiastic in its adoption of the doctrine. The classic indispensability test that arises in the EU is seen in the case of Oscar Bronner. The European Court of Justice (“ECJ”) addressed whether the refusal by a dominant firm to provide access to an infrastructure service constituted abuse under Article 82 of the European community (“EC”) Treaty. The EC treaty precedes the present Treaty on the Functioning of the European Union (“TFEU”).

Bronner published Der Standard, a daily newspaper in Austria, which held a relatively minor position in the market, accounting for approximately 3.6 percent of national circulation and 6 percent of advertising revenues. In contrast, Mediaprint published two major dailies, which collectively commanded around 46.8 percent of circulation and 42 percent of advertising income.

Mediaprint had developed a nationwide home delivery scheme for distributing its newspapers. Bronner requested inclusion in this scheme, since alternatives like postal delivery were not as economically viable. Bronner sought judicial intervention to compel Mediaprint to include Der Standard in its distribution network for reasonable compensation.

The ECJ ultimately ruled against Bronner, holding that a refusal to deal would only amount to an abuse where the facility was indispensable to the extent where  a lack of access could foreclose all competition in the downstream market. The Court found that Bronner had not proven the absence of viable alternatives nor shown that the refusal would eliminate effective competition. Therefore, the test that arises out of Bronner is as follows: 

(1) Indispensability: The facility or service must be objectively indispensable for carrying on the requesting party’s business in the downstream market. It must be shown that there is no actual or potential substitute. 

(2) Elimination of Competition: The refusal must be likely to eliminate all effective competition in the downstream market where the requesting party seeks to operate.

(3) Prevention of Emergence of New Product: The refusal must prevent the appearance of a new product or service for which there is potential consumer demand. 

(4) Lack of Objective Justification: The refusal must not be objectively justified. That is, the dominant firm must not have legitimate business reasons for the refusal.

The test is a particularly high threshold for anything to qualify as an essential facility. In the latter judgement in Microsoft, the ECJ reduced the threshold for prong (2), to an elimination of effective competition. Prong (3) has seen development through the ECJ judgements in Magill and IMS. The (3) prong is kept limited to circumstances, where the essential input is covered by a legal monopoly, such as Intellectual property protections. 

Therefore, the evolution of the Essential Facilities doctrine, traces some commonalities between the United States and the European Union. These similarities function on the basis of similar economic rationale, which  is: (1) where duplication of infrastructure would be economically unviable, competition law intervention becomes necessary to prevent the facility owner from leveraging such facility; (2) denial of such a facility would lead to a severe handicap on potential market entrants; and (3) without regulation, the essential facility owner can foreclose competition in adjacent markets by denying access or setting discriminatory terms.

India has recognised denial of market access under Section 4 as being inclusive of the doctrine of essential facilities, even though the same has not yet  seen application in the Indian context. This recognition primarily stems from the DG report in Arshiya Rail. The CCI has not yet based a decision on the Essential facilities doctrine. 

Recent academic concerns surround digital markets, and whether such a doctrine’s application must be tweaked to suit the digital context. Both the EU and India have tabled bills seeking to regulate digital markets under separate statutes. Therefore, it is worth exploring the structure of digital markets in depth, before assessing feasibility of such a doctrine in the digital context. 

(II) The Structural Challenges of Applying Traditional Antitrust Tools to Indian Digital Markets

In this section, I will first address the specific challenges that digital markets in India present to conventional frameworks of competition law enforcement. I aim to demonstrate that standard tools used to regulate brick and mortar industries differ significantly from those used for digital markets. 

The first concern lies in the structure of digital markets, particularly those shaped by network effects. Digital platforms typically operate multi-sided markets, bringing together users, advertisers, and service providers on a single interface. Each new user adds value to the platform as a whole, strengthening its market position and making it more attractive to others. This feedback loop allows dominant firms to scale quickly and secure early advantages that are difficult to displace. Importantly, such dominance is achieved without the need to raise prices or restrict output, making it difficult to detect through traditional economic indicators.

The second concern that lies with digital markets, is their reliance on vast and non-replicable datasets. Access to user data allows dominant platforms not only to personalise services and target advertising but also to monitor competitors and anticipate market shifts. Recent scholarship has noted that data is not just an ordinary input but something that magnifies scale and scope economies. In India, firms that capture early datasets can improve their algorithms faster than competitors and entrench their position before rivals can react. This feedback loop undermines contestability and makes it nearly impossible for new entrants to catch up without access to comparable data. As previously stated, digital markets rely on new competitors who invest in significant innovation, such that they may replace the current firm, which acts like a short-term monopoly over the market. Lack of access to such a significant input can potentially extend the short-term monopoly of the dominant firm into perpetuity, effectively killing competition in those markets. 

The real issue with India’s fragmented digital regulation is not delay but the lack of institutional coherence. In competition law, effective remedy design depends on the ability to recognise and respond to overlapping harms. When data control and market foreclosure cut across the mandates of the CCI, and the Data Protection Board, enforcement becomes uncertain. Constitutional economics studies, how institutional structures affect the behaviour of economic actors.Such an analysis is particularly useful for studying how multiple regulators may affect how firms evade legal obligations”Firms may rely on the lack of coordination between regulators, such that it leads to “coordination failures”, which in turn, may lead to either underenforcement or over-enforcement. These are situations where institutions cannot work together to constrain dominant firms, either due to unclear mandates or incompatible priorities. That invites regulatory arbitrage, where powerful firms exploit these gaps to delay or avoid accountability. Regulatory arbitrage involves situations where firms exploit differences between regulatory bodies to reduce their exposure to enforcement or legal obligations. Such an issue is particularly apparent in the CCI’s decision in the WhatsApp investigation, that the Data Protection Board and the CCI would have simultaneous jurisdiction. 

The ideal solution to the problem has been debated extensively. I specifically argue over the course of my next section, that such concerns should be addressed by sectoral regulation, and not via the over extension of pre-existing concepts within competition law. 

(III) Why Digital Markets Need Sectoral Regulation, Not Doctrinal Overreach

In this section, I argue for the regulation of digital markets by a specific market regulator. To do so, I first explore why EFD must not be applied to sectors which do not have sectoral regulation by the legislature. Second, I argue that ex-ante regulation concerning essential facilities, can pose to be particularly useful.

EFD has often been viewed as a less desirable alternative to sectoral regulation, by Antitrust scholars particularly in the United States. Richard Posner is the most prominent advocate of this line of thought. To understand why such a view may be taken, it is essential to understand the underlying economic rationale. Posner sheds light on this idea in his chapter on exclusionary practices on the new economy. 

He argues that meaningful intervention, even if a finding of essential facilities is made out, can pose its own challenges. A court, if it intervenes in an essential facilities dispute, has one of two choices:- 1) To compel access to the facility, but let price be fixed via negotiation and 2) compel access to the facility and fix a particular price. The first firm would have no incentive to make these inputs available at competitive prices, to undertakings that they do not want to deal with. A firm with no obligation to charge a competitive price, would provide access but at very high rates, effectively keeping access equally limited. 

If on the other hand, the CCI decides to determine the competitive price at which such an input should be supplied in the market, it would start playing the role of a sectoral regulator. Price fixing of inputs is usually undertaken by sectoral regulators, such as the TRAI and the CERC. Additionally, the CCI does not possess the requisite manpower or expertise to keep determining competitive prices in various sectors, on a regular basis. If data is mandated to be sold on equal terms and at the same prices, and would be further circumscribed within the legal limits of the Data Protection Draft Bill, a sectoral regulator could ensure compliance while achieving the ends of the EFD.

If the CCI fixes a price too high, then it risks creating no meaningful access to the data that it has classified as essential. If the CCI ends up fixing the price too low, any incentive to create a new, more efficient method of data collection would be lost. This is due to the fact that the competitor who would create a more efficient facility, no longer has any incentive to, as access to an existing but less efficient system continues to be maintained at cheap prices. The cost associated with the development of such a facility would seem prohibitive to any firm, as the opportunity to make profits from the same have significantly reduced. A sectoral regulator possesses more sectoral experience, and the appropriate institutional structure to ensure regular updation of prices. 

A sectoral regulator could also designate what facilities are considered essential by the particular sector, and what competitive prices would be specifically for the sale of such inputs. Particularly for data, as it does not constitute a product manufactured but extracted, the relevant innovation would be better collection of data. This in turn has to be balanced with the significant amount of data dependency of digital markets. Such sensitive price balancing that has to be done on a regular basis cannot be the prerogative of the competition authority, which is not equipped to engage in such regular price updation. This would allow not just for meaningful intervention, but also prevent abusive practices from creating valuable networks, before intervention can take place.   

Conclusion

The Essential Facilities Doctrine (EFD) has historically addressed access to physical infrastructure that is uneconomical to duplicate and indispensable for market participation. While its role in traditional markets is well established, applying it to India’s digital economy without careful institutional calibration would be both doctrinally unsound and economically risky.

Digital markets are structurally distinct. They rely on network effects, scale-driven data advantages, and fast-moving innovation cycles. These features make foreclosure harder to detect using conventional indicators and complicate remedial design. India’s current competition regime recognises the EFD only under Section 3 of the Competition Act and lacks precedent or institutional expertise to impose and monitor remedies such as data-sharing or interoperability. Applying the doctrine under these conditions would effectively force the CCI to act as a sectoral regulator, including setting access terms or prices. These are functions for which it is neither mandated nor equipped.

Ex-post enforcement under general competition law cannot keep pace with the self-reinforcing dynamics of digital markets. To avoid regulatory arbitrage and enforcement delays, India must adopt a sector-specific, ex-ante approach backed by legislation. A dedicated digital regulator would have the mandate and flexibility to identify essential inputs, define fair access standards, and update rules in step with technological change.

Therefore, the EFD should remain a high-threshold doctrine, not a frontline tool in digital enforcement. Effective governance in the digital economy will depend on institutional clarity, regulatory coherence, and proactive, sector-specific intervention.

About the Author

Rishab Venkat Geddam is a third-year law student at National Law School of India University, Bengaluru.