Antitrust

1 0 8 This ruling has important implications for antitrust analysis, not only for the credit card industry, but for other industries that operate in two-sided, or even multi- sided platform markets where firms must compete simultaneously for different groups of customers whose demands are distinct but interrelated. BACKGROUND American Express contracts with merchants to accept charges on its charge and credit cards in return for its agreement to reimburse merchants for those charges, minus a designated merchant discount fee. American Express's merchant contracts typically contain non-discrimination provisions (NDPs) in which the merchant agrees not to discriminate against American Express by, inter alia, indicating a preference for another card or attempting to dissuade cardholders from using the card. United States v. American Express Co., 838 F.3d 179, 191 (2d Cir. 2016). The plaintiffs (the U.S. Department of Justice (DOJ) and 17 state Attorneys General) challenged the NDPs under Section One of the Sherman Act, arguing that the NDPs unreasonably restrained competition because they allegedly reduced competitors' incentives to reduce merchant fees because reducing merchant fees would not necessarily result in greater volume. Id. at 192. After a lengthy bench trial, the District Court agreed, finding that the NDPs were unreasonable restraints in violation of the Sherman Act. United States v. American Express Co., 88 F. Supp. 3d 143 (E.D.N.Y. 2015). Based on this finding, the court entered a sweeping injunction that not only prohibited ANTITRUST LITIGATION 20 B E C A U S E T H E N D P S A R E V E R T I C A L R E S T R A I N T S S U B J E C T T O T H E R U L E O F R E A S O N , T H E S U P R E M E C O U R T B E G A N W I T H M A R K E T D E F I N I T I O N United States Supreme Court Accepts the Importance of Two-Sided Markets Analysis

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