On June 25, 2018 the Supreme Court ruled, in a 5-4 decision, that American Express’s antisteering rules do not violate federal antitrust laws. In reaching this conclusion the Court determined that, for two-sided markets like credit cards, both sides of the platform must be analyzed when determining whether a practice has an anticompetitive effect. Because Ohio and the other states challenging American Express’s antisteering rules had focused only on the price increase on the merchant side of the two-sided market, and ignored the impact on cardholders, they did not carry their burden of showing that the antisteering rules resulted in anticompetitive pricing, i.e., that the antisteering rules had an adverse effect on the market as a whole. Specifically, the plaintiffs had not accounted for the consumer side of the market, which the Court found must be considered in determining the competitive impact of American Express’s antisteering rules.
At issue in the case were American Express’s antisteering rules: contractual terms that prohibit merchants who accept American Express from attempting to persuade consumers to use a non-American Express credit card. The American Express antisteering rules did not prevent merchants from steering consumers toward debit cards, checks, or cash.
Ultimately, the two rules to be drawn from the case are (1) certain two-sided markets must be examined holistically to determine whether conduct produces an anticompetitive effect and (2) evidence of a price increase on one side of such two-sided markets, without more, is insufficient to show an anticompetitive impact.
The Court’s ruling sought to