Supreme Court Rejects Challenge to AmEx’s “Anti-Steering Provisions” and Signals Shift in Antitrust Analysis for “Two-Sided Markets”
On June 25, 2018, the Supreme Court in Ohio v. American Express Co., No. 16-1454, held that plaintiffs had failed to demonstrate that Amex’s contractual anti-steering provisions unlawfully restrained competition under Section 1 of the Sherman Act. After finding that Amex’s two-sided transaction platform constituted a single relevant product market due to strong “indirect network effects,” a 5-4 justice majority affirmed the Second Circuit’s conclusion that plaintiffs failed to meet their burden of showing that Amex’s vertical restraints had a substantial anticompetitive effect that harmed consumers in the relevant market. An important decision for the modern digital economy, where two-sided electronic markets are becoming more and more common, the Supreme Court’s ruling signals that modern antitrust jurisprudence should evolve to match the unique factual circumstances of each “market” and that claimants will face a heavy burden in demonstrating that a two-sided platform has unlawfully restrained trade.