Consumer Protections in the New Economy: Antitrust Implications of Ohio v. American Express


The ever-changing economy of the 21st century has transformed the ways Americans work and spend their money. Accordingly, firms in newer technology-driven sectors have become some of the dominant forces in the business world, and have consolidated unprecedented amounts of power in their markets. For example, companies like Google and Amazon have dominated their respective industries (search engines and e-commerce), while companies in older industries have engaged in numerous mergers and acquisitions to increase their market power amid a variety of economic changes (such as in banking and airlines) [1, 2, 3]. As such, the increased concentration of critical American industries in the hands of just a few firms has made antitrust law in the United States even more important than ever. One case being considered in the Supreme Court, however, could jeopardize the Department of Justice’s ability to litigate on behalf of consumers when they are threatened with anticompetitive business behaviors.

In late February, the Supreme Court considered the case of Ohio v. American Express. The case revolves around credit card company American Express’s use of anti-steering provisions, which instruct merchants that they cannot charge consumers who use their card more than they charge users of other cards, namely those issued by Visa, Mastercard, and Discover (the other three major credit card companies) [4]. While the provision is not inherently anticompetitive, what might be problematic—and what is at the heart of this case—is that American Express charges more to merchants who accept its card per transaction than the other card companies do, and prevents merchants from disclosing the fees they pay to credit card companies [5]. This leads to higher costs for merchants, who in turn might pass on these costs and raise the prices of their goods or services for all consumers. This is the argument presented by the state of Ohio and several other states that have joined the lawsuit, as well as the Justice Department, which has sided with the states [6].

American Express, however, has argued that these provisions have allowed the company to compete with the far larger Visa and Mastercard, which have more widespread networks of merchants and more consumers who utilize their cards, and thereby can afford to charge lower fees to merchants [7]. Initially, a district-level court sided with the plaintiffs, arguing that such anti-steering provisions violated the Sherman Antitrust Act [8]. This ruling was reversed, however, under the Second Circuit court, which stated that the states and Justice Department did not establish that such fees were harmful to consumers in addition to merchants. This ruling put the burden of proof on the plaintiffs to establish that the provisions were truly anticompetitive [9].

This case is important because American Express and credit card companies in general operate in what is called a “two-sided market.” This means that these types of companies serve two groups: the first being merchants who must decide whether or not to accept certain cards in their places of business, and the second being consumers, who select which card they will use [10]. Credit card companies are not the only firms that operate in two-sided markets; indeed, many technology companies utilize this market set-up as well. For example, Facebook operates in a market where it seeks to get consumers to utilize its social networking application, while also attempting to get advertisers to pay to use their platform to market to consumers using the application. Google and other search engine companies operate in a very similar fashion. Meanwhile, Amazon links consumers and other companies as well, with consumers using the platform to purchase items and companies and other merchants using the platform to make sales [11].

Given the marked similarities in the business models of both credit card companies and technology companies, Ohio v. American Express will inevitably have highly significant implications for these industries, even though the case just involves the former. If the Supreme Court accepts the decision of the Second Circuit Court, this could set a precedent that could allow tech companies to argue in the future that price increases on one side of the market do not necessarily entail anticompetitive behavior, putting the burden of proof on consumers and the plaintiffs in antitrust cases to prove that harm was done [12]. Several technology companies have noticed the value in establishing this precedent, and an industry trade group, the Computer and Communications Industry Association, has submitted an amicus brief on behalf of the likes of Amazon, Google, and Facebook, in favor of the ruling of the Second Circuit [13].

Given these circumstances, it appears that there a lot at stake in Ohio v. American Express. The exchanging economy of recent years has left many potential loopholes that new types of companies can exploit to increase their profitability and shut out competition. The rapid developments that characterize the new American economy have left traditional antitrust law behind, and this case proves that it needs to catch up as new types of business models arise. Should the Supreme Court side with the plaintiffs in this case, this could ensure that antitrust law continues to operate in the way that it was intended to: to protect consumers from corporate behavior that increases profitability at the expense of harming consumers.

Works Cited:

[1] Khan, Lina. “The Supreme Court Case That Could Give Tech Giants More Power.” The New York Times, The New York Times, 2 Mar. 2018,

[2] Schaefer, Steve. “Five Biggest U.S. Banks Control Nearly Half Industry’s $15 Trillion In Assets.” Forbes, Forbes Magazine, 3 Dec. 2014,

[3] Yellin, Tal. “The Runway to the Final Four.” CNNMoney, Cable News Network,

[4] Goldfein, Shepard, and Karen Hoffman Lent. “The Supreme Court Takes on Two-Sided Markets.” Yahoo! Finance, Yahoo!, 9 Feb. 2018,

[5] White, Deborah. “Supreme Court Case Seeks Disclosure of Credit Card Fees to Benefit Consumers.” Fox News, FOX News Network, 24 Feb. 2018,

[6] Wheeler, Lydia. “Supreme Court Agrees to Hear American Express Case.” TheHill, 16 Oct. 2017,

[7] Chung, Andrew. “U.S. Supreme Court Liberals Skeptical of American Express Merchant…” Reuters, Thomson Reuters, 26 Feb. 2018,

[8] Farmer, Beth. “Argument Preview: Antitrust Analysis – Do Two-Sided Markets Require Different Rules?” SCOTUSblog, 20 Feb. 2018,

[9] Ibid.

[10] Goldfein, Shepard, and Karen Hoffman Lent. “The Supreme Court Takes on Two-Sided Markets.”

[11] Khan, Lina. “The Supreme Court Case That Could Give Tech Giants More Power.”

[12] McLaughlin, David. “U.S. Supreme Court Weighs Amex Rules in Antitrust Enforcement Test.”, Bloomberg, 26 Feb. 2018,

[13] Ibid.


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