The American Antitrust Institute sharply criticized the Supreme Court’s 5-4 decision rejecting a district court holding that American Express had violated the Sherman Act by preventing merchants from offering benefits to consumers to use cheaper, non-Amex credit cards.
“This decision is bad for consumers,” said AAI President Diana Moss. The district court had found that American Express’s ‘anti-steering’ rules inflate merchant fees on all credit card transactions and increase prices that merchants charge all consumers, even those who do not use credit cards.
The decision reinterprets the antitrust laws to make it harder for the government to prosecute antitrust cases in ‘two-sided transaction’ markets and creates confusion over what that means for the rest of the economy. Two-sided markets in general are increasingly common in the digital era, and include search engines, social networks, ride sharing, e-commerce, and rental exchanges, among other “platform” businesses.
“This is a tremendously activist judicial opinion,” said AAI General Counsel Richard Brunell. He explained, “The majority not only rejected settled precedent and basic economic logic on how the rule of reason should be applied, but it also failed to respect the fact-finding role of the district court judge and issued pronouncements on aspects of antitrust law that go well beyond what was necessary to decide the case.”
“In a time when the antitrust laws need to be stronger, not weaker, AAI hopes that Congress will take appropriate action to eliminate the harmful effects of this decision,” Moss said.
For further information, contact AAI President Diana Moss, 202-379-4662, AAI General Counsel Richard Brunell, 202-600-9640, or AAI Associate General Counsel Randy Stutz, 202-905-5420.