Ohio v. AmEx

Through contracts with the merchants who accept American Express cards, AmEx prohibits merchants from showing a preference for cheaper credit cards (like Visa or MasterCard) or offering their customers discounts or incentives to use those cards. In 2010, the federal government and a group of states went to court, charging AmEx with a violation of the Sherman Act antitrust law, which prohibits agreements that restrain trade. After a seven-week trial, the district court held that Amex’s merchant restraints suppress competition in violation of the Sherman Act. The U.S. Court of Appeals for the 2nd Circuit reversed, holding that the plaintiffs would also have to show that the anti-competitive effects outweighed the benefits – such as “cash-back” rewards and airline miles – to AmEx cardholders. Ohio, one of the plaintiffs, sought Supreme Court review. The question before the Court was whether the government’s showing that American Express’ anti-steering provisions stifle price competition on the merchant side of the credit-card platform suffices to prove anti-competitive effects and thereby shifts to American Express the burden of establishing any pro-competitive benefits from the provisions. Public Citizen joined an amicus brief explaining that consumer interests are undermined by anticompetitive restraints against merchants, such as the restraints at issue here. On June 25, 2018, the Supreme Court ruled in a 5-4 decision that American Express’s contracts had not been shown to be anticompetitive.