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Ohio v. Am. Express Co.

Supreme Court of the United States

February 26, 2018, Argued; June 25, 2018, Decided

No. 16-1454.


 [*2279]  Justice Thomas delivered the opinion of the Court.

American Express Company and American Express Travel Related Services Company (collectively, Amex) provide credit-card  [*2280]  services to both merchants and cardholders. When a cardholder buys something from a merchant who accepts Amex credit cards, Amex processes the transaction through its network, promptly pays the merchant, and subtracts a fee. If a merchant wants to accept Amex credit cards—and attract Amex cardholders to its business—Amex requires the merchant to agree to an antisteering contractual provision. The antisteering provision prohibits merchants from discouraging customers from using their Amex card after they have already entered the store and are about to buy something, thereby avoiding Amex’s fee. In this case, we must decide whether Amex’s antisteering provisions violate federal antitrust law. We conclude they do not.

Credit cards have become a primary way that consumers in the United States purchase goods and services. When a cardholder uses a credit card to buy something from a merchant, the [***8]  transaction is facilitated by a credit-card network. The network provides separate but interrelated services to both cardholders and merchants. For cardholders, the network extends them credit, which allows them to make purchases without cash and to defer payment until later. Cardholders also can receive rewards based on the amount of money they spend, such as airline miles, points for travel, or cash back. For merchants, the network allows them to avoid the cost of processing transactions and offers them quick, guaranteed payment. This saves merchants the trouble and risk of extending credit to customers, and it increases the number and value of sales that they can make.

 [**686]  By providing these services to cardholders and merchants, credit-card companies bring these parties together, and therefore operate what economists call a “two-sided platform.” As the name implies, a two-sided platform offers different products or services to two different groups who both depend on the platform to intermediate between them. See Evans & Schmalensee, Markets With Two-Sided Platforms, 1 Issues in Competition L. & Pol’y 667 (2008) (Evans & Schmalensee); Evans & Noel, Defining Antitrust Markets When Firms [***9]  Operate Two-Sided Platforms, 2005 Colum. Bus. L. Rev. 667, 668 (Evans & Noel); Filistrucchi, Geradin, Van Damme, & Affeldt, Market Definition in Two-Sided Markets: Theory and Practice, 10 J. Competition L. & Econ. 293, 296 (2014) (Filistrucchi). For credit cards, that interaction is a transaction. Thus, credit-card networks are a special type of two-sided platform known as a “transaction” platform. See id., at 301, 304, 307; Evans & Noel 676-678. The key feature of transaction platforms is that they cannot make a sale to one side of the platform without simultaneously making a sale to the other. See Klein, Lerner, Murphy, & Plache, Competition in Two-Sided Markets: The Antitrust Economics of Payment Card Interchange Fees, 73 Antitrust L. J. 571, 580, 583 (2006) (Klein). For example, no credit-card transaction can occur unless both the merchant and the cardholder simultaneously agree to use the same credit-card network. See Filistrucchi 301.

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138 S. Ct. 2274 *; 201 L. Ed. 2d 678 **; 2018 U.S. LEXIS 3845 ***; 86 U.S.L.W. 4561; 2018-1 Trade Cas. (CCH) P80,427; 27 Fla. L. Weekly Fed. S 471; 2018 WL 3096305

OHIO, et al., Petitioners v. AMERICAN EXPRESS COMPANY, et al.

Notice: The LEXIS pagination of this document is subject to change pending release of the final published version.

Subsequent History: As revised June 25, 2018.


United States v. Am. Express Co., 838 F.3d 179, 2016 U.S. App. LEXIS 17502 (2d Cir. N.Y., Sept. 26, 2016)

Disposition: Affirmed.


merchants, card, cardholders, platform, credit-card, provisions, two-sided, network, effects, prices, anticompetitive, customers, shoppers, antisteering, transactions, nondiscrimination, merchant-related, steering, markets, credit card, competitors, rewards, shopper-related, increased price, relevant market, anti trust law, substitutes, market power, output, rule of reason

Antitrust & Trade Law, Regulated Practices, Price Fixing & Restraints of Trade, Sherman Act, Scope, Price Fixing & Restraints of Trade, Per Se Rule & Rule of Reason, Practices Governed by Per Se Rule, Sherman Act, Vertical Restraints, Evidence, Burdens of Proof, Burden Shifting, Claims, Initial Burden of Persuasion, Per Se Rule & Rule of Reason, Market Definition, Relevant Market, Product Market Definition, Relevant Market, Regulated Industries, Financial Institutions, Regulated Practices