On Monday, June 25, the Supreme Court by a 5-4 decision in Ohio v. Am. Express Co. held that American Express’s (“AmEx”) anti-steering provisions do not violate Section 1 of the Sherman Act. This case has important implications for determining antitrust liability in “two-sided markets” like credit card networks and digital platforms that have at least two types of customers, such as merchants or advertisers and consumers.
The most significant element of the Court’s holding is that, for purposes of determining competitive effects of conduct in a two-sided market, the relevant market consists of both sides of the market when the market exhibits significant indirect network effects (i.e., significant competitive effects or interdependency among multiple customer types). Accordingly, to satisfy their initial burden under the rule of reason, plaintiffs must demonstrate that the challenged restraint has a substantial anticompetitive effect across the entire platform. “Evidence of a price increase on one side of a two-sided transaction platform cannot by itself demonstrate an anticompetitive exercise of market power.” Id. at 15. The Court’s decision adds new factors to the already fact-intensive, rule-of-reason analysis as applied to critical sectors of the economy.