Key Takeaways
- In Ohio v. American Express, the Supreme Court held that for two-sided transaction platforms like credit card networks, the relevant market must include both sides, such as merchants and cardholders.
- Some lower courts applied the ruling broadly, including in a merger case, prompting concern that it could shield platforms from antitrust scrutiny.
- The Sabre merger decision Julie Elmer discusses was later vacated, and courts and agencies continue to debate how far two-sided market reasoning should reach.
When a credit card company charges merchants high fees but rewards its cardholders, who is harmed and who benefits? In 2018, the Supreme Court's answer reshaped how antitrust law defines markets for platforms.
In this TalksOnLaw Brief, Joel Cohen talks with Julie Elmer, a partner in the antitrust and litigation practices at Freshfields and a former trial lawyer in the Justice Department's Antitrust Division, about Ohio v. American Express and its ripple effects.
The Case
Elmer explains that the case turns on market definition: an antitrust plaintiff must define the market where the defendant is allegedly harming competition. The Justice Department and a group of states sued American Express in 2010 over anti-steering provisions in its merchant contracts, which barred merchants from discouraging customers from using Amex cards to avoid its higher merchant fees. The government won at trial, the Second Circuit reversed, and the states carried the case to the Supreme Court. Writing for a 5-4 majority, Justice Clarence Thomas reasoned that American Express sells transactions to merchants and cardholders simultaneously, so the market must include both sides. Because cardholders benefited from rewards funded by merchant fees, the plaintiffs had not shown harm to competition overall.
Where the Line Falls
Justice Thomas recognized that not all two-sided platforms should be treated the same; the rule applies to two-sided transaction platforms, where simultaneity exists. Elmer notes that, taken to an extreme, almost anything could be called two-sided. A federal district court in Illinois rejected dental insurers' argument that they operated such a platform, because monthly premiums do not line up with when patients visit a dentist.
The Sabre Cases
Elmer's concern is that some lower courts stretched the decision. In US Airways v. Sabre, the Second Circuit held that the market must include both sides of a two-sided transaction platform as a matter of law, adding, in her view, the word “always” to the Supreme Court's holding. Then in United States v. Sabre, a merger case under Section 7 of the Clayton Act, a district court relied on both opinions to conclude that Sabre and Farelogix, which served only airlines, could not be competitors as a matter of law, despite business documents describing them as rivals. Elmer, who tried that case for the government, argues this departs from Brown Shoe's focus on commercial realities, and she warns that overreading Amex could provoke a backlash against cases where two-sided analysis is warranted.
What to Know Now
Ohio v. American Express remains the leading authority on two-sided transaction platforms. The Sabre merger decision no longer stands as precedent: after the parties abandoned the deal, the Third Circuit granted the Justice Department's motion to vacate it in 2020. In the remanded US Airways case, a 2022 jury found that Sabre had willfully maintained monopoly power but awarded only $1 in nominal damages. The 2023 Merger Guidelines now include a dedicated discussion of multi-sided platforms, covering competition between platforms, on a platform, and to displace a platform. Courts continue to confront platform arguments in major technology cases, including the Justice Department's ad tech case against Google, in which a federal court found in 2025 that Google unlawfully monopolized certain advertising technology markets. Proposals to overrule Amex by statute, such as one in a 2020 House report, have not been enacted. Supporters see the decision as sound economics for platforms, while critics share Elmer's worry that it makes platform cases harder to bring.
