Divided court defines credit-card networks as single two-sided market, rejecting antitrust challenge to anti-steering provision

By Beth Farmer

Today, the Supreme Court ruled that American Express’ anti-steering provisions do not violate the federal antitrust laws. In a 5-4 decision, Justice Clarence Thomas wrote that credit networks such as Amex provide services to cardholders and merchants in a “special type of two-sided platform known as a ‘transaction platform,’” and that this platform is a relevant market for the purposes of antitrust analysis in this vertical-restraints case.

According to the majority, the district court did not define the relevant market properly and the plaintiffs below, Ohio and 10 other states, failed to meet their burden of proving that the challenged anti-steering provision caused competitive harm in a properly defined market. Thomas was joined by Chief Justice John Roberts and Justices Anthony Kennedy, Samuel Alito and Neil Gorsuch. Justice Stephen Breyer, joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan, dissented.

The case arose from a Sherman Act Section 1 complaint filed by the U.S. Department of Justice and 17 states that challenged provisions in contracts between American Express and merchants that accept Amex credit cards.

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