Ohio v. American Express Co.
The Court ruled that American Express's contract clauses barring merchants from steering customers toward cheaper credit cards do not violate federal antitrust law, because the government and states failed to show the clauses harmed competition in the overall credit-card market.
The decision treats credit-card networks as a single 'two-sided' market covering both cardholders and merchants together, meaning challengers must show harm across the whole market rather than just higher fees to merchants alone.
How it got here: A federal trial court ruled for the government after a 7-week trial; the Second Circuit reversed; the government and states asked the Supreme Court to review.
The Case in Depth
What happened
American Express charges merchants higher fees than rival card networks to fund cardholder rewards, and it requires merchants to sign contracts barring them from discouraging customers from using Amex cards at checkout—a practice called steering. The federal government and several states sued, arguing these anti-steering provisions illegally raised the fees merchants pay by preventing merchants from pushing customers toward cheaper cards.
The question before the Court
Could American Express keep merchants from encouraging shoppers to use cheaper credit cards, without violating federal antitrust law?
The Court's answer
No — the Court ruled that American Express's anti-steering provisions do not violate antitrust law, because the government and states did not prove they harmed competition in the credit-card market as a whole. Credit-card networks are a two-sided market: they simultaneously sell services to cardholders and to merchants, and a sale to one side cannot happen without a matching sale to the other, so both sides must be counted together when measuring competitive harm.
The challengers focused only on higher merchant fees, but that is just one side of the market. They needed to show that the fees pushed the overall price of a credit-card transaction above competitive levels, reduced the number of transactions, or otherwise suppressed competition across the market — and the evidence showed transaction volume growing and no proof Amex's prices exceeded competitive levels, so that showing failed.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Merchants that accept American Express cards will keep paying its anti-steering rules and cannot encourage customers to use cheaper cards. Businesses and antitrust enforcers challenging similar contracts at other two-sided platforms—like ride-hailing apps or online marketplaces—now face a tougher evidentiary bar, since they must prove harm to the whole platform, not just one side of it.
What changes now
This is a final merits decision affirming the Second Circuit, so American Express's anti-steering provisions remain enforceable and the government's challenge is over. The ruling's two-sided-market framework will likely shape how future antitrust cases against other platform businesses—app stores, marketplaces, ride-share services—are analyzed, since challengers must now address competitive effects across the whole platform rather than one side alone.
What this does not decide
The Court did not decide whether anti-steering provisions could ever violate antitrust law under different facts or evidence; it decided only that these particular plaintiffs failed to prove anticompetitive harm to the market as defined. It also did not rule on the many other kinds of two-sided businesses beyond credit-card networks.
Concurrences and dissents
Dissent — Justice Breyer
Justice Breyer argued the majority wrongly required plaintiffs to prove harm across a combined two-sided market when the District Court's detailed factual findings already showed direct anticompetitive harm to merchants alone, which should have been enough under existing precedent. He viewed merchant-related and cardholder-related services as economic complements, not substitutes, so they should not have been merged into one market, and criticized the majority for ignoring unchallenged trial findings that anti-steering provisions blocked competitors like Discover from competing on price and produced no offsetting benefit to cardholders.
How the Court got there
The legal reasoning, step by step
- The Court first identified that under the rule of reason — the standard antitrust test that weighs a restraint's actual competitive effects rather than banning it outright — the plaintiffs bore the initial burden of proving the anti-steering provisions caused a substantial anticompetitive effect harming consumers in the relevant market.
- To assess that burden, the Court had to define the relevant market, reasoning that credit-card networks are a 'two-sided transaction platform' — a business that cannot sell to cardholders without simultaneously selling to merchants — so both groups had to be analyzed together as one market rather than as separate merchant and cardholder markets.
- Because two-sided platforms exhibit strong 'indirect network effects' — meaning the value to one side depends on participation by the other side — a price increase on one side alone does not by itself show anticompetitive harm to the market as a whole.
- Applying that combined-market framework, the Court found the plaintiffs' evidence of higher merchant fees insufficient, because they never showed that the overall price of a credit-card transaction rose above competitive levels or that output fell.
- The Court noted that credit-card transaction volume actually grew substantially during the period the fees rose, which under existing precedent is more consistent with growing demand than with anticompetitive price increases.
- Finding no proof that the anti-steering provisions stifled competition among card networks, and noting several procompetitive features of the provisions, the Court concluded the plaintiffs failed the first step of the rule-of-reason test.
Doctrinal impact
Cases affected by this decision
Distinguishes United States v. Grinnell Corp. (384 U. S. 563)
Majority relies on it for combining related services into one market; dissent says its facts don't support extending that approach here.
Distinguishes Times-Picayune Publishing Co. v. United States (345 U. S. 594)
Dissent argues this case required narrowly defining the market around the restrained service, unlike the majority's approach.