Two sides to one story

Author: | Published: 28 Aug 2018

The US Supreme Court’s Ohio v American Express decision of June 2018 analysed the economics of the two-sided market for credit card transactions

Cravath Swaine & Moore represented American Express in achieving a Supreme Court victory in a lawsuit originally brought by the Department of Justice (DoJ) and several state attorneys general. The case challenged provisions in Amex's merchant agreements that prohibit merchants who accept Amex cards from discriminating against Amex at the point of sale. While MasterCard and Visa settled similar claims, Cravath tried the case for Amex in New York federal court. Although the trial court ruled adversely, finding that the provisions raised prices paid by merchants, in 2016 a panel of the Second Circuit unanimously reversed the decision and directed judgment in favour of Amex, holding that the relevant market for antitrust analysis included both merchants and cardholders.

Although the DoJ and several states initially chose...