Ohio v. American Express Co.

On June 25, 2018, the U.S. Supreme Court ruled in Ohio v. American Express Co. that American Express’s anti-steering provisions—which prohibit merchants from encouraging customers to use other credit cards—do not violate Section 1 of the Sherman Act. A group of 11 states, led by Ohio, sued American Express, alleging that these rules restrained competition. The Court, in a 5-4 decision authored by Justice Clarence Thomas, determined that the credit card industry operates as a two-sided market, linking cardholders and merchants. It held that the plaintiffs must prove net harm to both sides of the market to establish an antitrust violation. Because the government failed to show such harm, the ruling affirmed the Second Circuit’s decision in favor of American Express, making it harder to challenge platform business models under federal antitrust law.

The Supreme Court affirmed the Second Circuit by a 5-4 vote, holding that the anti-steering rules do not violate antitrust law because the states failed to demonstrate net harm to competition on both sides of the two-sided credit card market.

Whether American Express’s anti-steering provisions constitute an unreasonable restraint of trade under the Sherman Act, and how to define the relevant market and assess competitive effects in the context of a two-sided platform serving both cardholders and merchants.

The decision established a crucial precedent for antitrust analysis of two-sided platforms, requiring plaintiffs to prove overall competitive harm across all user groups. It raised the bar for antitrust challenges against platform-based businesses, influencing subsequent evaluations of digital marketplaces and tech companies, and spurred ongoing debate over whether traditional antitrust tools adequately address modern platform economies.