Ohio v. American Express Co.
The Court ruled that American Express's contract rules barring merchants from steering customers to cheaper cards do not violate federal antitrust law, because the government and states failed to show the rules harmed competition across the full credit-card market.
The decision treats credit cards as a two-sided business serving both shoppers and merchants together, meaning antitrust challenges to such platforms must show harm on both sides at once — a standard that makes it harder to challenge similar business arrangements in other two-sided industries.
How it got here: A federal trial court ruled for the government after a bench trial; the Second Circuit reversed; the government and states asked the Supreme Court to review that reversal.
The Case in Depth
What happened
American Express charges merchants higher fees than rivals like Visa and MasterCard, using the extra revenue to fund cardholder rewards. To stop merchants from discouraging shoppers from using Amex cards to avoid those fees, Amex included "antisteering" clauses in its merchant contracts. The federal government and several states sued, claiming these clauses illegally restrained trade by keeping merchant fees artificially high.
The question before the Court
Could American Express keep merchants from telling customers to use a cheaper credit card instead of Amex at checkout?
The Court's answer
No — the Court ruled that American Express's antisteering provisions do not violate federal antitrust law, because the government and states failed to prove they harmed competition across the credit-card market as a whole. The Court explained that credit-card networks are "two-sided platforms" selling a single joint transaction to merchants and cardholders together, so proving higher merchant fees alone isn't enough; challengers must show the restraint raised overall transaction prices, reduced transactions, or suppressed competition between networks.
The plaintiffs' evidence focused only on merchant-fee increases, while credit-card transaction volume actually grew and rival networks kept competing on price and rewards during the period the provisions were in effect. Because the plaintiffs did not show that Amex's rules made the two-sided market worse off overall, they failed to clear the first step of the antitrust "rule of reason" test, and the lower appeals court's ruling for Amex was affirmed.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Merchants that accept American Express must continue honoring its rules against steering customers toward cheaper cards, even though this can mean paying higher fees. The ruling also sets a market-definition approach that companies running platforms connecting two groups of customers — like ride-hailing apps or online marketplaces — can point to when defending similar contract terms from antitrust suits.
What changes now
This is a final merits decision affirming the Second Circuit, so the government's and states' antitrust challenge to Amex's antisteering provisions is over; those provisions remain enforceable. The ruling establishes how courts should analyze antitrust claims involving similar two-sided platform businesses going forward, potentially affecting future litigation against other platform companies, though it does not itself launch any new proceedings.
What this does not decide
The Court did not decide whether antisteering provisions could ever be found anticompetitive under a different evidentiary showing, nor did it rule on steps two or three of the rule-of-reason framework (procompetitive justifications or less restrictive alternatives), since the plaintiffs lost at the first step.
Concurrences and dissents
Dissent — Justice Breyer
“But because the challenged contractual term clearly has serious anticompetitive effects, I dissent.”Breyer's opening statement of disagreement with the majority's ruling.
Justice Breyer argued the majority wrongly required proof of harm across a combined two-sided market when the district court's unchallenged factual findings already showed direct anticompetitive harm on the merchant side alone, which he said should have been enough under precedent like Indiana Federation of Dentists. He contended merchant-related and cardholder-related services are economic complements, not parts of one market, and that Amex's provisions blocked rivals like Discover from competing on price. He would have upheld the trial court's ruling against Amex and, at most, remanded for further proceedings on procompetitive justifications.
How the Court got there
The legal reasoning, step by step
- Because the antisteering clauses are 'vertical' restraints—agreements between a company and the merchants it does business with, rather than agreements among competitors—the Court applied the 'rule of reason,' a fact-specific test asking whether a restraint's actual competitive effects harm consumers, rather than treating it as automatically illegal.
- Under the three-step framework both sides accepted, the plaintiffs first had to prove the antisteering clauses caused a substantial anticompetitive effect harming consumers in the relevant market, before the burden would shift to Amex.
- The Court held that because credit-card networks are 'two-sided platforms' that simultaneously sell one linked transaction to both a merchant and a cardholder, courts must evaluate competitive effects across both sides together rather than looking only at merchant fees in isolation.
- Applying that combined-market view, the Court found the plaintiffs offered no evidence that Amex's overall transaction prices exceeded competitive levels, that credit-card output fell, or that competition among networks was suppressed—since transaction volume actually grew and rival networks kept competing on price and rewards.
- Because the plaintiffs' proof focused only on merchant-side fee increases and did not show harm to the two-sided market as a whole, the Court concluded they had not met their initial burden under the rule of reason.
Doctrinal impact
Cases affected by this decision
Distinguishes United States v. Grinnell Corp. (384 U. S. 563)
The dissent argues Grinnell doesn't support combining merchant and cardholder services into one market here.
Distinguishes Times-Picayune Publishing Co. v. United States (345 U. S. 594)
Dissent says this case supports analyzing only the merchant-side market, contrary to the majority's combined approach.