Otter Tail Power Co. v. United States, 410 U.S. 366 (1973), is a United States Supreme Court decision often cited as the first case in which the Court held violative of the antitrust laws a single firm's refusal to deal with other firms that denied them access to a facility essential to engaging in business (a so-called essential facility).

[3] The United States sued Otter Tail for monopolizing the retail distribution and sale of power to towns in its operating area.

Such actions were taken, defendant argues, to preserve the electric power free enterprise system for the benefit of its customers, shareholders and employees.

[4]The court found that Otter Tail had a monopoly in the sale of electric power at retail in the area in which it operated—more than 75% of the relevant market.

Because of its dominant position Otter Tail is able to deprive towns of the benefits of competition which would result from municipally owned facilities.

[10] When Otter Tail's franchise in several towns expired, the citizens voted to establish their own municipal distribution systems.

Otter Tail used its "dominance to foreclose potential entrants into the retail area from obtaining electric power from outside sources of supply.

The Court responded that Otter Tail should "protect itself against loss by operating with superior service, lower costs, and improved efficiency.

The Court also held in that case, however, that "where the purpose to suppress competition is evidenced by repetitive lawsuits carrying the hallmark of insubstantial claims," the conduct "is within the 'mere sham' exception" to that protection and is thus subject to antitrust prohibitions.

[17] After hearing arguments but without taking additional evidence, the court found: [T]he repetitive use of litigation by Otter Tail was timed and designed principally to prevent the establishment of municipal electric systems and thereby to preserve defendant's monopoly.

Instead, the Court spoke of the defendant's termination of a successful program that was beneficial to consumers, failure to establish a plausible business justification, and willingness to sacrifice short-term profits in order to injure competition down the road.

Circuit held that the district court should have instructed the jury concerning the essential facility doctrine, citing Otter Tail as having reaffirmed its announcement in Terminal Railroad.

[26] In Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP,[27] the Supreme Court in dicta spoke harshly against the essential facilities doctrine.

[28]Alon Kapen addresses two lines of cases in which court have ordered monopolists to stop refusing to deal with competitors.

"[31] Daniel Troy states that Otter Tail "is commonly cited to justify a per se rule in essential facility cases," but a "close examination" belies that claim.

While its fact pattern may fit the essential facilities doctrine, "the Court's reasoning makes clear that it did not treat Otter Tail differently from any other monopolist using its monopoly power to suppress competition in a downstream market."

Finding a facility to be essential means that the competitive process is an unreliable mechanism for correcting significant short-run welfare losses.

That criticism, Ratner argues, does not adequately address the problem of whether to prohibit the activities because they are socially harmful even without increasing market power.

Therefore, the essential facilities doctrine provides "the only meaningful remedy for these harmful denials" and unfortunately that "requires someone, usually a poorly equipped federal court," to impose judicial regulation.

"[36] Glen Robinson argues that "the essential facilities doctrine provides the proper framework for analyzing both regulatory and antitrust requirements for forced dealing or sharing among rivals.

"[37] In deciding what is an essential facility, Robinson deprecates the distinction between tangible assets (such as the transmission lines in Otter Tail) and intellectual property, based on the claim that it "is critical for encouraging owners to invest in innovation."

In such circumstances, "a court should force sharing of essential information only if there is no alternative method of accomplishing the purpose of establishing workable competition.

"[39] Robinson disagrees with Judge Posner's view that "forced sharing of facilities deemed to be naturally monopolistic can [never] serve a legitimate competitive purpose."

[40] Robinson concludes that a well-defined essential facilities doctrine is preferable to "the amorphous and untheorized 'it-all-depends' principle followed in Aspen Skiing.