The Application of The Essential Facilities Doctrine on the Liberalized Petroleum Industry: A Competition Law Perspective

Abstract

The liberalization of the monopolistic industries is one of the major economic policies in Chinese Taipei starting from the late 90's. The liberalization of petroleum market has been realized in September 2000, when Formosa Petroleum Co. entered the market long been monopolized by Chinese Petroleum Company.

In this project, we intended to study two layers of competition issues raised after liberalization. The first is the possible applications of the so-called "Essential Facilities Doctrine, EFD" to the liberalized petroleum market. The second issue we study is the joint-sale agreement and merger between upstream oil suppliers and downstream retailers (gas stations). In the first tier of questions, we have adopted the method of comparative study. We selected EU, United States and Australia as the region for comparison. We compared the legal background and rulings of the court, which constitute the EFD in these jurisdictions. We concluded that there are indeed some "bottleneck facilities" in the petroleum market, airport depot and underground pipelines is a good example. However, we also content that there should be a clear line between competition law and industry-specified regulation laws. Competition law and EFD are not the proper tool to fulfill the liberalization policy.