The American Express Case: Back to the Future

Abstract

This paper examines what the Supreme Court’s 2018 decision in the American Express case, which is the only U.S. antitrust case that has explicitly addressed the unique issues raised by so-called platform or multi-sided markets, might tell us about the attitudes of the Court’s five-Justice majority about antitrust law.The majority opinion conflated the enduring normative contributions of the Chicago School with its embrace of empirical propositions from 40 years ago that have not stood the test of time and some of which are, in any event, not applicable to two-sided markets. The majority was willing to decide novel issues on the basis of abstract ideas about vertical restraints and free riding that were central to Chicago School analysis 40 years ago but which have since been shown to require more qualification and modification depending on factual context. The majority ignored the fact findings of the district court, and it was plainly willing to increase the risk of false negatives. Its decision was a triumph of ideology over fact-based decision-making.