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OHIO v. AMERICAN EXPRESS CO. 

Syllabus 

with merchants.  To avoid higher fees, merchants sometimes attempt
to dissuade cardholders from using Amex cards at the point of sale—
a practice known as “steering.”  Amex places antisteering provisions 
in its contracts with merchants to combat this. 

In  this  case,  the  United  States  and  several  States  (collectively, 
plaintiffs)  sued  Amex,  claiming  that  its  antisteering  provisions  vio-
late  §1  of  the  Sherman  Antitrust  Act.    The  District  Court  agreed, 
finding that the credit-card market should be treated as two separate
markets—one  for  merchants  and  one  for  cardholders—and  that 
Amex’s  antisteering  provisions  are  anticompetitive  because  they  re-
sult in higher merchant fees.  The Second Circuit reversed.  It deter-
mined  that  the  credit-card  market  is  one  market,  not  two.    And  it 
concluded that Amex’s antisteering provisions did not violate §1. 

Held:  Amex’s  antisteering  provisions  do  not  violate  federal  antitrust

law.  Pp. 8–20.

(a) Section  1  of  the  Sherman  Act  prohibits  “unreasonable  re-
straints” of trade.  State Oil Co. v. Khan, 522 U. S. 3, 10.  Restraints 
may be unreasonable in one of two ways—unreasonable per se or un-
reasonable as judged under the “rule of reason.”  Business Electronics 
Corp.  v.  Sharp  Electronics  Corp.,  485  U. S.  717,  723.    The  parties 
agree that Amex’s antisteering provisions should be judged under the
rule  of  reason  using  a  three-step  burden-shifting  framework.    They
ask this Court to decide whether the plaintiffs have satisfied the first
step in that framework—i.e., whether they have proved that Amex’s 
antisteering provisions have a substantial anticompetitive effect that
harms consumers in the relevant market.  Pp. 8–10.

(b) Applying the rule of reason generally requires an accurate defi-
nition  of  the  relevant  market.    In  this  case,  both  sides  of  the  two-
sided credit-card market—cardholders and merchants—must be con-
sidered.  Only a company with both cardholders and merchants will-
ing to use its network could sell transactions and compete in the cred-
it-card  market.    And  because  credit-card  networks  cannot  make  a 
sale  unless  both  sides  of  the  platform  simultaneously  agree  to  use 
their services, they exhibit more pronounced indirect network effects 
and  interconnected  pricing  and  demand.    Indeed,  credit-card  net-
works are best understood as supplying only one product—the trans-
action—that  is  jointly  consumed  by  a  cardholder  and  a  merchant.
Accordingly, the two-sided market for credit-card transactions should 
be analyzed as a whole.  Pp. 10–15.

(c) The plaintiffs have not carried their burden to show anticompet-
itive  effects.  Their  argument—that  Amex’s  antisteering  provisions
increase merchant fees—wrongly focuses on just one side of the mar-
ket.  Evidence of a price increase on one side of a two-sided transac-
tion platform cannot, by itself, demonstrate an anticompetitive exer-