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Issue:  The Sherman Act

Ohio v. American Express Co.

16-1454

QUESTION(S) PRESENTED

This case asks how Section 1 of the Sherman Act, which bans unreasonable restraints of trade, applies to “two-sided” platforms that unite distinct customer groups. Such platforms are ubiquitous, ranging from eBay (serving buyers and sellers), to newspapers (serving readers and advertisers). Here, credit-card networks bring cardholder customers together with merchant customers for ordinary transactions. When doing so, Respondents American Express Company and American Express Travel Related Services Company (“Amex”) contractually bar merchant customers from steering cardholder customers to credit cards that charge merchants lower prices. Applying the “rule of reason,” the district court held that: (1) the Government proved that Amex’s anti-steering provisions were anticompetitive because they stifled competition among credit-card companies for the prices charged to merchants, and (2) Amex failed to establish any procompetitive benefits. The Second Circuit reversed. It held that, to prove that the anti steering provisions were anticompetitive (and so to transfer the burden of establishing procompetitive benefits to Amex), the Government bore the burden to show not just that the provisions had anticompetitive pricing effects on the merchant side, but also that those anticompetitive effects outweighed any benefits on the cardholder side. The question presented is:

Under the “rule of reason,” did the Government’s showing that Amex’s anti-steering provisions stifled price competition on the merchant side of the creditcard platform suffice to prove anticompetitive effects and thereby shift to Amex the burden of establishing any procompetitive benefits from the provisions?

DECISION

Awaiting Oral Arguments

PROCEEDING BELOW

United States Court of Appeals for the Second Circuit
Decided September 26, 2016
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