Ohio v. American Express

Anti-steering provisions within a merchant contract are not per-se anticompetitive under the Sherman Antitrust Act.

American Express (“Amex”) participates in what is known as a “two-sided transaction platform” in the credit card market. It is considered two-sided because the market includes a cardholder and a merchant, both of which are required to execute a credit card transaction. Amex has roughly 26% of the market share, and implements a unique business model by offering more rewards to cardholders and expensive practice. To make up the difference, Amex charges higher fees on the merchant side of the transaction. Because of the higher fees, merchants try to “steer” customers away from using Amex and toward cards with lower fees. To combat this, Amex introduced “anti-steering” provisions in its merchant contracts that “prohibit merchants from implying a preference for non-Amex cards[.]” Petitioners, the United States and, other states individually, sued Amex claiming the anti-steering provision was anti-competitive in violation of the Sherman Act. The District Court agreed with Petitioner, delineating the credit card market into two separate markets. The Second Circuit Court of Appeals reversed, holding that the credit card market is one market. On appeal, the Supreme Court concluded that the anti-steering provisions did not unlawfully restraint trade. Analyzing the two-sided transaction platform as within a single market, the court found that Petitioners failed to establish “anticompetitive effects in the relevant market.” AFFIRMED.