April 18, 2016 Articles

The Role of Two-Sided Markets in United States v. American Express

A recent example of the important role economics and experts play in complex antitrust cases.

Eric S. Hochstadt and Meaghan Thomas

Given the historical relationship between antitrust law and economics, expert witnesses in antitrust litigation have a vitally important role: to aid the court with the necessary tools to define the relevant market and assess the competitive effects of the challenged conduct in that market. The United States v. American Express litigation is a recent example of the important role economics and experts play in complex antitrust cases.

On February 19, 2015, after a 7-week bench trial with testimony from more than 30 fact witnesses and 4 top economic experts, U.S. District Judge Nicholas G. Garaufis ruled that American Express's "anti-steering" rules placed an unreasonable restraint of trade on merchants' ability to "steer" consumers to use other credit cards in violation of section 1 of the Sherman Act. United States v. Am. Express, No. 10-CV-4496, 2015 WL 728563, at *4–5 (E.D.N.Y. Feb. 19, 2015). The civil antitrust case was brought by the U.S. Department of Justice and 17 state attorneys general. The 150-page decision was notable for a number of reasons, but it is especially illustrative of how expert economic analysis can inform legal analysis of two-sided market platforms.

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