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															SUPREME COURT OF THE UNITED STATES

															_________________

															No. 16–1454

															_________________

															OHIO, et al., PETITIONERS v. AMERICAN EXPRESS COMPANY, et al.

															on writ of certiorari to the united states
court of appeals for the second circuit

															[June 25, 2018]

															Justice Thomas delivered the opinion of the
Court.

															American Express Company and American Express
Travel Related Services Company (collectively, Amex) provide
credit-card services to both merchants and cardholders. When a
cardholder buys something from a merchant who accepts Amex credit
cards, Amex processes the transaction through its network, promptly
pays the merchant, and subtracts a fee. If a merchant wants to
accept Amex credit cards—and attract Amex cardholders to its
business—Amex requires the merchant to agree to an antisteering
contractual provision. The antisteering provision prohibits
merchants from discouraging customers from using their Amex card
after they have already entered the store and are about to buy
something, thereby avoiding Amex’s fee. In this case, we must
decide whether Amex’s antisteering provisions violate federal
antitrust law. We conclude they do not.

															I

															A

															Credit cards have become a primary way that
consumers in the United States purchase goods and services. When a
cardholder uses a credit card to buy something from a merchant, the
transaction is facilitated by a credit-card network. The network
provides separate but inter- related services to both cardholders
and merchants. For cardholders, the network extends them credit,
which allows them to make purchases without cash and to defer
payment until later. Cardholders also can receive rewards based on
the amount of money they spend, such as airline miles, points for
travel, or cash back. For merchants, the network allows them to
avoid the cost of processing transactions and offers them quick,
guaranteed payment. This saves merchants the trouble and risk of
extending credit to customers, and it increases the number and
value of sales that they can make.

															By providing these services to cardholders and
merchants, credit-card companies bring these parties together, and
therefore operate what economists call a “two-sided platform.” As
the name implies, a two-sided platform offers different products or
services to two different groups who both depend on the platform to
intermediate between them. See Evans & Schmalensee, Markets
With Two-Sided Platforms, 1 Issues in Competition L. & Pol’y
667 (2008) (Evans & Schmalensee); Evans & Noel, Defining
Antitrust Markets When Firms Operate Two-Sided Platforms, 2005
Colum. Bus. L. Rev. 667, 668 (Evans & Noel); Filistrucchi,
Geradin, Van Damme, & Affeldt, Market Definition in Two-Sided
Markets: Theory and Practice, 10 J. Competition L. & Econ. 293,
296 (2014) (Filistrucchi). For credit cards, that interaction is a
transaction. Thus, credit-card networks are a special type of
two-sided platform known as a “transaction” platform. See id ., at 301, 304, 307; Evans & Noel 676–678. The key
feature of transaction platforms is that they cannot make a sale to
one side of the platform without simultaneously making a sale to
the other. See Klein, Lerner, Murphy, & Plache, Competition in
Two-Sided Markets: The Antitrust Economics of Payment Card
Interchange Fees, 73 Antitrust L. J. 571, 580, 583 (2006)
(Klein). For example, no credit-card transaction can occur unless
both the merchant and the cardholder simultaneously agree to use
the same credit-card network. See Filistrucchi 301.

															Two-sided platforms differ from traditional
markets in important ways. Most relevant here, two-sided platforms
often exhibit what economists call “indirect network effects.”
Evans & Schmalensee 667. Indirect network effects exist where
the value of the two-sided platform to one group of participants
depends on how many members of a different group participate. D.
Evans & R. Schmalensee, Matchmakers: The New Economics of
Multisided Platforms 25 (2016). In other words, the value of the
services that a two-sided platform provides increases as the number
of participants on both sides of the platform increases. A credit
card, for example, is more valuable to cardholders when more
merchants accept it, and is more valuable to merchants when more
cardholders use it. See Evans & Noel 686–687; Klein 580, 584.
To ensure sufficient participation, two-sided platforms must be
sensitive to the prices that they charge each side. See Evans &
Schmalensee 675; Evans & Noel 680; Muris, Payment Card
Regulation and the (Mis)Application of the Economics of Two-Sided
Markets, 2005 Colum. Bus. L. Rev. 515, 532–533 (Muris); Rochet
& Tirole, Platform Competition in Two-Sided Markets, 1 J. Eur.
Econ. Assn. 990, 1013 (2003). Raising the price on side A risks
losing participation on that side, which decreases the value of the
platform to side B. If participants on side B leave due to this
loss in value, then the platform has even less value to side
A—risking a feedback loop of declining demand. See Evans &
Schmalensee 675; Evans & Noel 680–681. Two-sided platforms
therefore must take these indirect network effects into account
before making a change in price on either side. See Evans &
Schmalensee 675; Evans & Noel 680–681.[ 1 ]

															Sometimes indirect network effects require
two-sided platforms to charge one side much more than the other.
See Evans & Schmalensee 667, 675, 681, 690–691; Evans &
Noel 668, 691; Klein 585; Filistrucchi 300. For two-sided
platforms, “ ‘the [relative] price structure matters, and
platforms must design it so as to bring both sides on
board.’ ” Evans & Schmalensee 669 (quoting Rochet &
Tirole, Two-Sided Markets: A Progress Report, 37 RAND J. Econ. 645,
646 (2006)). The optimal price might require charging the side with
more elastic demand a below-cost (or even negative) price. See
Muris 519, 550; Klein 579; Evans & Schmalensee 675; Evans &
Noel 681. With credit cards, for example, networks often charge
cardholders a lower fee than merchants because cardholders are more
price sensitive.[ 2 ] See Muris
522; Klein 573–574, 585, 595. In fact, the network might well lose money on the cardholder side by offering rewards such
as cash back, airline miles, or gift cards. See Klein 587; Evans
& Schmalensee 672. The network can do this because increasing
the number of cardholders increases the value of accepting the card
to merchants and, thus, increases the number of merchants who
accept it. Muris 522; Evans & Schmalensee 692. Networks can
then charge those merchants a fee for every transaction (typically
a percentage of the purchase price). Striking the optimal balance
of the prices charged on each side of the platform is essential for
two-sided platforms to maximize the value of their services and to
compete with their rivals.

															B

															Amex, Visa, MasterCard, and Discover are the
four dominant participants in the credit-card market. Visa, which
is by far the largest, has 45% of the market as measured by
transaction volume.[ 3 ] Amex and
MasterCard trail with 26.4% and 23.3%, respectively, while Discover
has just 5.3% of the market.

															Visa and MasterCard have significant structural
advantages over Amex. Visa and MasterCard began as bank
cooperatives and thus almost every bank that offers credit cards is
in the Visa or MasterCard network. This makes it very likely that
the average consumer carries, and the average merchant accepts,
Visa or MasterCard. As a result, the vast majority of Amex
cardholders have a Visa or MasterCard, but only a small number of
Visa and Master-Card cardholders have an Amex. Indeed, Visa and
MasterCard account for more than 432 million cards in circulation
in the United States, while Amex has only 53 million. And while 3.4
million merchants at 6.4 million locations accept Amex, nearly
three million more locations accept Visa, MasterCard, and
Discover.[ 4 ]

															Amex competes with Visa and MasterCard by using
a different business model. While Visa and MasterCard earn half of
their revenue by collecting interest from their cardholders, Amex
does not. Amex instead earns most of its revenue from merchant
fees. Amex’s business model thus focuses on cardholder spending
rather than card- holder lending. To encourage cardholder spending,
Amex provides better rewards than other networks. Due to its
superior rewards, Amex tends to attract cardholders who are
wealthier and spend more money. Merchants place a higher value on
these cardholders, and Amex uses this advantage to recruit
merchants.

															Amex’s business model has significantly
influenced the credit-card market. To compete for the valuable
cardholders that Amex attracts, both Visa and MasterCard have
introduced premium cards that, like Amex, charge merchants higher
fees and offer cardholders better rewards. To maintain their lower
merchant fees, Visa and MasterCard have created a sliding scale for
their various cards—charging merchants less for low-reward cards
and more for high-reward cards. This differs from Amex’s strategy,
which is to charge merchants the same fee no matter the rewards
that its card offers. Another way that Amex has influenced the
credit-card market is by making banking and card-payment services
available to low-income individuals, who otherwise could not
qualify for a credit card and could not afford the fees that
traditional banks charge. See 2 Record 3835–3837, 4527–4529. In
sum, Amex’s business model has stimulated competitive innovations
in the credit-card market, increasing the volume of transactions
and improving the quality of the services.

															Despite these improvements, Amex’s business
model sometimes causes friction with merchants. To maintain the
loyalty of its cardholders, Amex must continually invest in its
rewards program. But, to fund those investments, Amex must charge
merchants higher fees than its rivals. Even though Amex’s
investments benefit merchants by encouraging cardholders to spend
more money, merchants would prefer not to pay the higher fees. One
way that merchants try to avoid them, while still enticing Amex’s
cardholders to shop at their stores, is by dissuading cardholders
from using Amex at the point of sale. This practice is known as
“steering.”

															Amex has prohibited steering since the 1950s by
placing antisteering provisions in its contracts with merchants.
These antisteering provisions prohibit merchants from implying a
preference for non-Amex cards; dissuading customers from using Amex
cards; persuading customers to use other cards; imposing any
special restrictions, conditions, disadvantages, or fees on Amex
cards; or promoting other cards more than Amex. The antisteering
provisions do not, however, prevent merchants from steering
customers toward debit cards, checks, or cash.

															C

															In October 2010, the United States and several
States (collectively, plaintiffs) sued Amex, claiming that its
antisteering provisions violate §1 of the Sherman Act, 26Stat. 209,
as amended, 15 U. S. C. §1.[ 5 ] After a 7-week trial, the District Court agreed that
Amex’s antisteering provisions violate §1. United States v. American Express Co., 88 F. Supp. 3d 143, 151–152 (EDNY
2015). It found that the credit-card market should be treated as
two separate markets—one for merchants and one for cardholders. See id., at 171–175. Evaluating the effects on the merchant side
of the market, the District Court found that Amex’s antisteering
provisions are anticompetitive because they result in higher
merchant fees. See id., at 195–224.

															The Court of Appeals for the Second Circuit
reversed. United States v. American Express Co. , 838
F. 3d 179, 184 (2016). It concluded that the credit-card
market is one market, not two. Id. , at 196–200. Evaluating
the credit-card market as a whole, the Second Circuit concluded
that Amex’s antisteering provisions were not anticompetitive and
did not violate §1. See id., at 200–206.

															We granted certiorari, 583 U. S. ___
(2017), and now affirm.

															II

															Section 1 of the Sherman Act prohibits
“[e]very contract, combination in the form of trust or otherwise,
or conspir- acy, in restraint of trade or commerce among the
several States.” 15 U. S. C. §1. This Court has long
recognized that, “[i]n view of the common law and the law in this
country” when the Sherman Act was passed, the phrase “restraint of
trade” is best read to mean “undue restraint.” Standard Oil Co.
of N. J. v. United States , 221 U. S. 1, 59–60
(1911). This Court’s precedents have thus understood §1 “to outlaw
only unreasonable restraints.” State Oil Co. v. Khan , 522 U. S. 3, 10 (1997) (emphasis added).

															Restraints can be unreasonable in one of two
ways. A small group of restraints are unreasonable per se because they “ ‘ “always or almost
always tend to restrict competition and decrease
output.” ’ ” Business Electronics Corp. v. Sharp Electronics Corp. , 485 U. S. 717, 723 (1988).
Typically only “horizontal” restraints—restraints “imposed by
agreement between competitors”—qualify as unreasonable per se . Id., at 730. Restraints that are not
unreasonable per se are judged under the “rule of
reason.” Id. , at 723. The rule of reason requires courts to
conduct a fact-specific assessment of “market power and market
structure . . . to assess the [restraint]’s actual
effect” on competition. Copperweld Corp. v. Independence
Tube Corp. , 467 U. S. 752, 768 (1984). The goal is to
“distinguis[h] between restraints with anticompetitive effect that
are harmful to the consumer and restraints stimulating competition
that are in the consumer’s best interest.” Leegin Creative
Leather Products, Inc. v. PSKS, Inc. , 551 U. S.
877, 886 (2007).

															In this case, both sides correctly acknowledge
that Amex’s antisteering provisions are vertical
restraints— i.e., restraints “imposed by agreement between
firms at different levels of distribution.” Business
Electronics , supra , at 730. The parties also correctly
acknowledge that, like nearly every other vertical restraint, the
anti- steering provisions should be assessed under the rule of
reason. See Leegin , supra , at 882; State Oil , supra , at 19; Business Electronics , supra , at
726; Continental T. V., Inc. v. GTE Sylvania Inc. ,
433 U. S. 36, 57 (1977).

															To determine whether a restraint violates the
rule of reason, the parties agree that a three-step,
burden-shifting framework applies. Under this framework, the
plaintiff has the initial burden to prove that the challenged
restraint has a substantial anticompetitive effect that harms
consumers in the relevant market. See 1 J. Kalinowski, Antitrust
Laws and Trade Regulation §12.02[1] (2d ed. 2017) (Kalinowski); P.
Areeda & H. Hovenkamp, Fundamentals of Antitrust Law §15.02[B]
(4th ed. 2017) (Areeda & Hovenkamp); Capital Imaging Assoc.,
P. C. v. Mohawk Valley Medical Associates, Inc. ,
996 F. 2d 537, 543 (CA2 1993). If the plaintiff carries its
burden, then the burden shifts to the defendant to show a
procompetitive rationale for the restraint. See 1 Kalinowski
§12.02[1]; Areeda & Hovenkamp §15.02[B]; Capital Imaging
Assoc. , supra, at 543. If the defendant makes this
showing, then the burden shifts back to the plaintiff to
demonstrate that the procompetitive efficiencies could be
reasonably achieved through less anticompetitive means. See 1
Kalinowski §12.02[1]; Capital Imaging Assoc. , supra, at 543.

															Here, the parties ask us to decide whether the
plaintiffs have carried their initial burden of proving that Amex’s
antisteering provisions have an anticompetitive effect. The
plaintiffs can make this showing directly or indirectly. Direct
evidence of anticompetitive effects would be “ ‘proof of
actual detrimental effects [on competition],’ ” FTC v. Indiana Federation of Dentists , 476 U. S. 447, 460
(1986), such as reduced output, increased prices, or decreased
quality in the relevant market, see 1 Kalinowski §12.02[2]; Craftsman Limousine, Inc. v. Ford Motor Co. , 491
F. 3d 381, 390 (CA8 2007); Virginia Atlantic Airways
Ltd. v. British Airways PLC , 257 F. 3d 256, 264
(CA2 2001). Indirect evidence would be proof of market power plus
some evidence that the challenged restraint harms competition. See
1 Kalinowski §12.02[2]; Tops Markets, Inc. v. Quality
Markets, Inc. , 142 F. 3d 90, 97 (CA2 1998); Spanish
Broadcasting System of Fla. v. Clear Channel Communications,
Inc. , 376 F. 3d 1065, 1073 (CA11 2004).

															Here, the plaintiffs rely exclusively on direct
evidence to prove that Amex’s antisteering provisions have caused
anticompetitive effects in the credit-card market.[ 6 ] To assess this evidence, we must first
define the relevant market. Once defined, it becomes clear that the
plaintiffs’ evidence is insufficient to carry their burden.

															A

															Because “[l]egal presumptions that rest on
formalistic distinctions rather than actual market realities are
generally disfavored in antitrust law,” Eastman Kodak Co. v. Image Technical Services, Inc. , 504 U. S. 451, 466–467
(1992), courts usually cannot properly apply the rule of reason
without an accurate definition of the relevant market.[ 7 ] “Without a definition of [the]
market there is no way to measure [the defendant’s] ability to
lessen or destroy competition.” Walker Process Equipment,
Inc. v. Food Machinery & Chemical Corp. , 382
U. S. 172, 177 (1965); accord, 2 Kalinowski §24.01[4][a].
Thus, the relevant market is defined as “the area of effective
competition.” Ibid. Typically this is the “arena within
which significant substitution in consumption or production
occurs.” Areeda & Hovenkamp §5.02; accord, 2 Kalinowski
§24.02[1]; United States v. Grinnell Corp. , 384
U. S. 563, 571 (1966). But courts should “combin[e]” different
products or services into “a single market” when “that combination
reflects commercial realities.” Id., at 572; see also Brown Shoe Co. v. United States , 370 U. S. 294,
336–337 (1962) (pointing out that “the definition of the relevant
market” must “ ‘correspond to the commercial realities’ of the
industry”).

															As explained, credit-card networks are two-sided
platforms. Due to indirect network effects, two-sided platforms
cannot raise prices on one side without risking a feedback loop of
declining demand. See Evans & Schmalensee 674–675; Evans &
Noel 680–681. And the fact that two-sided platforms charge one side
a price that is below or above cost reflects differences in the two
sides’ demand elasticity, not market power or anticompetitive
pricing. See Klein 574, 595, 598, 626. Price increases on one side
of the platform likewise do not suggest anticompetitive effects
without some evidence that they have increased the overall cost of
the platform’s services. See id., at 575, 594, 626. Thus,
courts must include both sides of the platform—merchants and
cardholders—when defining the credit-card market.

															To be sure, it is not always necessary to
consider both sides of a two-sided platform. A market should be
treated as one sided when the impacts of indirect network effects
and relative pricing in that market are minor. See Filistrucchi
321–322. Newspapers that sell advertisements, for example, arguably
operate a two-sided platform because the value of an advertisement
increases as more people read the newspaper. Id ., at 297,
315; Klein 579. But in the newspaper-advertisement market, the
indirect networks effects operate in only one direction; newspaper
readers are largely indifferent to the amount of advertising that a
newspaper contains. See Filistrucchi 321, 323, and n. 99;
Klein 583. Because of these weak indirect network effects, the
market for newspaper advertising behaves much like a one-sided
market and should be analyzed as such. See Filistrucchi 321; Times-Picayune Publishing Co. v. United States , 345
U. S. 594, 610 (1953).

															But two-sided transaction platforms, like the
credit-card market, are different. These platforms facilitate a
single, simultaneous transaction between participants. For credit
cards, the network can sell its services only if a mer- chant and
cardholder both simultaneously choose to use the network. Thus,
whenever a credit-card network sells one transaction’s worth of
card-acceptance services to a merchant it also must sell one
transaction’s worth of card-payment services to a cardholder. It
cannot sell transaction services to either cardholders or merchants
individually. See Klein 583 (“Because cardholders and merchants
jointly consume a single product, payment card transactions, their
consumption of payment card transactions must be directly
proportional”). To optimize sales, the network must find the
balance of pricing that encourages the greatest number of matches
between cardholders and merchants.

															Because they cannot make a sale unless both
sides of the platform simultaneously agree to use their services,
two-sided transaction platforms exhibit more pronounced indirect
network effects and interconnected pricing and demand. Transaction
platforms are thus better understood as “suppl[ying] only one
product”—transactions. Klein 580. In the credit-card market, these
transactions “are jointly consumed by a cardholder, who uses the
payment card to make a transaction, and a merchant, who accepts the
payment card as a method of payment.” Ibid. Tellingly,
credit cards determine their market share by measuring the volume
of transactions they have sold.[ 8 ]

															Evaluating both sides of a two-sided transaction
platform is also necessary to accurately assess competition. Only
other two-sided platforms can compete with a two-sided platform for
transactions. See Filistrucchi 301. A credit-card company that
processed transactions for merchants, but that had no cardholders
willing to use its card, could not compete with Amex. See ibid. Only a company that had both cardholders and merchants
willing to use its network could sell transactions and compete in
the credit-card market. Similarly, if a merchant accepts the four
major credit cards, but a cardholder only uses Visa or Amex, only
those two cards can compete for the particular transaction. Thus,
competition cannot be accurately assessed by looking at only one
side of the platform in isolation.[ 9 ]

															For all these reasons, “[i]n two-sided
transaction markets, only one market should be defined.” Id ., at 302; see also Evans & Noel 671 (“[F]ocusing on
one dimension of . . . competition tends to distort the
competition that actually exists among [two-sided platforms]”). Any
other analysis would lead to “ ‘ “mistaken
inferences” ’ ” of the kind that could
“ ‘ “chill the very conduct the antitrust laws are
designed to protect.” ’ ” Brooke Group Ltd. v. Brown & Williamson Tobacco Corp. , 509 U. S. 209,
226 (1993); see also Matsushita Elec. Industrial Co. v. Zenith Radio Corp. , 475 U. S. 574, 594 (1986)
(“ ‘[W]e must be concerned lest a rule or precedent that
authorizes a search for a particular type of undesirable pricing
behavior end up by discouraging legitimate price
competition’ ”); Leegin , 551 U. S., at 895 (noting
that courts should avoid “increas[ing] the total cost of the
antitrust system by prohibiting procompetitive conduct the
antitrust laws should encourage”). Accordingly, we will analyze the
two-sided market for credit-card transactions as a whole to
determine whether the plaintiffs have shown that Amex’s
antisteering provisions have anticompetitive effects.

															B

															The plaintiffs have not carried their burden
to prove anticompetitive effects in the relevant market. The
plaintiffs stake their entire case on proving that Amex’s
agreements increase merchant fees. We find this argument
unpersuasive.

															As an initial matter, the plaintiffs’ argument
about merchant fees wrongly focuses on only one side of the
two-sided credit-card market. As explained, the credit-card market
must be defined to include both merchants and cardholders. Focusing
on merchant fees alone misses the mark because the product that
credit-card companies sell is transactions, not services to
merchants, and the competitive effects of a restraint on
transactions cannot be judged by looking at merchants alone.
Evidence of a price increase on one side of a two-sided transaction
platform cannot by itself demonstrate an anticompetitive exercise
of market power. To demonstrate anticompetitive effects on the
two-sided credit-card market as a whole, the plaintiffs must prove
that Amex’s antisteering provisions increased the cost of
credit-card transactions above a competitive level, reduced the
number of credit-card transactions, or otherwise stifled
competition in the credit-card market. See 1 Kalinowski §12.02[2]; Craftsman Limousine, Inc. , 491 F. 3d, at 390; Virginia Atlantic Airways Ltd. , 257 F. 3d, at 264. They
failed to do so.

															1

															The plaintiffs did not offer any evidence that
the price of credit-card transactions was higher than the price one
would expect to find in a competitive market. As the District Court
found, the plaintiffs failed to offer any reliable measure of
Amex’s transaction price or profit margins. 88 F. Supp. 3d, at
198, 215. And the evidence about whether Amex charges more than its
competitors was ultimately inconclusive. Id., at 199, 202,
215.

															Amex’s increased merchant fees reflect increases
in the value of its services and the cost of its transactions, not
an ability to charge above a competitive price. Amex began raising
its merchant fees in 2005 after Visa and MasterCard raised their
fees in the early 2000s. Id., at 195, 199–200. As explained,
Amex has historically charged higher merchant fees than these
competitors because it delivers wealthier cardholders who spend
more money. Id., at 200–201. Amex’s higher merchant fees are
based on a careful study of how much additional value its
cardholders offer merchants. See id. , at 192–193. On the
other side of the market, Amex uses its higher merchant fees to
offer its cardholders a more robust rewards program, which is
necessary to maintain cardholder loyalty and encourage the level of
spending that makes Amex valuable to merchants. Id., at 160,
191–195. That Amex allocates prices between merchants and
cardholders differently from Visa and MasterCard is simply not
evidence that it wields market power to achieve anticompetitive
ends. See Evans & Noel 670–671; Klein 574–575, 594–595, 598,
626.

															In addition, the evidence that does exist cuts
against the plaintiffs’ view that Amex’s antisteering provisions
are the cause of any increases in merchant fees. Visa and Master-
Card’s merchant fees have continued to increase, even at merchant
locations where Amex is not accepted and, thus, Amex’s antisteering
provisions do not apply. See 88 F. Supp. 3d, at 222. This suggests
that the cause of increased merchant fees is not Amex’s
antisteering provisions, but rather increased competition for
cardholders and a corresponding marketwide adjustment in the
relative price charged to merchants. See Klein 575, 609.

															2

															The plaintiffs did offer evidence that Amex
increased the percentage of the purchase price that it charges
merchants by an average of 0.09% between 2005 and 2010 and that
this increase was not entirely spent on cardholder rewards. See 88
F. Supp. 3d , at 195–197, 215. The plaintiffs believe
that this evidence shows that the price of Amex’s transactions
increased.

															Even assuming the plaintiffs are correct, this
evidence does not prove that Amex’s antisteering provisions gave it
the power to charge anticompetitive prices. “Market power is the
ability to raise price profitably by restricting output .”
Areeda & Hovenkamp §5.01 (emphasis added); accord, Kodak , 504 U. S., at 464; Business Electronics ,
485 U. S., at 723. This Court will “not infer competitive
injury from price and output data absent some evidence that tends
to prove that output was restricted or prices were above a
competitive level.” Brooke Group Ltd. , 509 U. S., at
237. There is no such evidence in this case. The output of
credit-card transactions grew dramatically from 2008 to 2013,
increasing 30%. See 838 F. 3d, at 206. “Where . . .
output is expanding at the same time prices are increasing, rising
prices are equally consistent with growing product demand.” Brooke Group Ltd. , supra, at 237. And, as previously
explained, the plaintiffs did not show that Amex charged more than
its competitors.

															3

															The plaintiffs also failed to prove that
Amex’s antisteering provisions have stifled competition among
credit-card companies. To the contrary, while these agreements have
been in place, the credit-card market experienced expanding output
and improved quality. Amex’s business model spurred Visa and
MasterCard to offer new premium card categories with higher
rewards. And it has increased the availability of card services,
including free banking and card-payment services for low-income
customers who otherwise would not be served. Indeed, between 1970
and 2001, the percentage of households with credit cards more than
quadrupled, and the proportion of households in the bottom-income
quintile with credit cards grew from just 2% to over 38%. See D.
Evans & R. Schmalensee, Paying With Plastic: The Digital
Revolution in Buying and Borrowing 88–89 (2d ed. 2005) (Paying With
Plastic).

															Nor have Amex’s antisteering provisions ended
competition between credit-card networks with respect to merchant
fees. Instead, fierce competition between networks has constrained
Amex’s ability to raise these fees and has, at times, forced Amex
to lower them. For instance, when Amex raised its merchant prices
between 2005 and 2010, some merchants chose to leave its network.
88 F. Supp. 3d, at 197. And when its remaining merchants
complained, Amex stopped raising its merchant prices. Id. ,
at 198. In another instance in the late 1980s and early 1990s,
competition forced Amex to offer lower merchant fees to “everyday
spend” merchants—supermarkets, gas stations, pharmacies, and the
like—to persuade them to accept Amex. See id., at 160–161,
202.

															In addition, Amex’s competitors have exploited
its higher merchant fees to their advantage. By charging lower
merchant fees, Visa, MasterCard, and Discover have achieved broader
merchant acceptance—approximately 3 million more locations than
Amex. Id. , at 204. This broader merchant acceptance is a
major advantage for these networks and a significant challenge for
Amex, since consumers prefer cards that will be accepted
everywhere. Ibid. And to compete even further with Amex,
Visa and MasterCard charge different merchant fees for different
types of cards to maintain their comparatively lower merchant fees
and broader acceptance. Over the long run, this competition has
created a trend of declining merchant fees in the credit-card
market. In fact, since the first credit card was introduced in the
1950s, merchant fees—including Amex’s merchant fees—have decreased
by more than half. See id., at 202–203; Paying With Plastic
54, 126, 152.

															Lastly, there is nothing inherently
anticompetitive about Amex’s antisteering provisions. These
agreements actually stem negative externalities in the credit-card
market and promote interbrand competition. When merchants steer
cardholders away from Amex at the point of sale, it undermines the
cardholder’s expectation of “welcome acceptance”—the promise of a
frictionless transaction. 88 F. Supp. 3d, at 156. A lack of
welcome acceptance at one merchant makes a cardholder less likely
to use Amex at all other merchants. This externality endangers the
viability of the entire Amex network. And it undermines the
investments that Amex has made to encourage increased cardholder
spending, which discourages investments in rewards and ultimately
harms both cardholders and merchants. Cf. Leegin , 551
U. S., at 890–891 (recognizing that vertical restraints can
prevent retailers from free riding and thus increase the
availability of “tangible or intangible services or promotional
efforts” that enhance competition and consumer welfare). Perhaps
most importantly, antisteering provisions do not prevent Visa,
MasterCard, or Discover from competing against Amex by offering
lower merchant fees or promoting their broader merchant
acceptance.[ 10 ]

															In sum, the plaintiffs have not satisfied the
first step of the rule of reason. They have not carried their
burden of proving that Amex’s antisteering provisions have
anticompetitive effects. Amex’s business model has spurred robust
interbrand competition and has increased the quality and quantity
of credit-card transactions. And it is “[t]he promotion of
interbrand competition,” after all, that “is . . . ‘the
primary purpose of the antitrust laws.’ ” Id ., at
890.

															*  *  *

															Because Amex’s antisteering provisions do not
unreasonably restrain trade, we affirm the judgment of the Court of
Appeals.

															It is so ordered. Notes 1 In a competitive market,
indirect network effects also encourage companies to take increased
profits from a price increase on side A and spend them on side B to
ensure more robust participation on that side and to stem the
impact of indirect network effects. See Evans & Schmalensee
688; Evans & Noel 670–671, 695. Indirect network effects thus
limit the platform’s ability to raise overall prices and impose a
check on its market power. See Evans & Schmalensee 688; Evans
& Noel 695. 2 “Cardholders are more
price-sensitive because many consumers have multiple payment
methods, including alternative payment cards. Most merchants, by
contrast, cannot accept just one major card because they are likely
to lose profitable incremental sales if they do not take [all] the
major payment cards. Because most consumers do not carry all of the
major payment cards, refusing to accept a major card may cost the
merchant substantial sales.” Muris 522. 3 All figures are accurate
as of 2013. 4 Discover entered the
credit-card market several years after Amex, Visa, and MasterCard.
It nonetheless managed to gain a foothold because Sears marketed
Discover to its already significant base of private-label
cardholders. Discover’s business model shares certain features with
Amex, Visa, and MasterCard. Like Amex, Discover interacts directly
with its cardholders. But like Visa and MasterCard, Discover uses
banks that cooperate with its network to interact with
merchants. 5 Plaintiffs also sued Visa
and MasterCard, claiming that their anti-steering provisions
violated §1. But Visa and MasterCard voluntarily revoked their
antisteering provisions and are no longer parties to this
case. 6 Although the plaintiffs
relied on indirect evidence below, they have abandoned that
argument in this Court. See Brief for United States 23, n. 4
(citing Pet. for Cert. i, 18–25). 7 The plaintiffs argue that
we need not define the relevant market in this case because they
have offered actual evidence of adverse effects on
competition—namely, increased merchant fees. See Brief for United
States 40–41 (citing FTC v. Indiana Federation of
Dentists , 476 U. S. 447 (1986), and Catalano, Inc. v. Target Sales, Inc. , 446 U. S. 643 (1980) ( per
curiam )). We disagree. The cases that the plaintiffs cite for
this proposition evaluated whether horizontal restraints had an
adverse effect on competition. See Indiana Federation of
Dentists , supra, at 450–451, 459 (agreement between
competing dentists not to share X rays with insurance companies); Catalano , supra, at 644–645, 650 (agreement among
competing wholesalers not to compete on extending credit to
retailers). Given that horizontal restraints involve agreements
between competitors not to compete in some way, this Court
concluded that it did not need to precisely define the relevant
market to conclude that these agreements were anticompetitive. See Indiana Federation of Dentists , supra, at 460–461; Catalano , supra, at 648–649. But vertical restraints
are different. See Arizona v. Maricopa County Medical
Soc. , 457 U. S. 332, 348, n. 18 (1982); Leegin
Creative Leather Products, Inc. v. PSKS, Inc. , 551
U. S. 877, 888 (2007). Vertical restraints often pose no risk
to competition unless the entity imposing them has market power,
which cannot be evaluated unless the Court first defines the
relevant market. See id ., at 898 (noting that a vertical
restraint “may not be a serious concern unless the relevant entity
has market power”); Easterbrook, Vertical Arrangements and the Rule
of Reason, 53 Antitrust L. J. 135, 160 (1984) (“[T]he possibly
anticompetitive manifestations of vertical arrangements can occur
only if there is market power”). 8 Contrary to the dissent’s
assertion, post, at 11–12, merchant services and cardholder
services are not complements. See Filistrucchi 297 (“[A] two-sided
market [is] different from markets for complementary products, in
which both products are bought by the same buyers, who, in their
buying decisions, can therefore be expected to take into account
both prices”). As already explained, credit-card companies are best
understood as supplying only one product—transactions—which is
jointly consumed by a cardholder and a merchant. See Klein 580.
Merchant services and cardholder services are both inputs to this
single product. See ibid. 9 Nontransaction platforms,
by contrast, often do compete with companies that do not operate on
both sides of their platform. A newspaper that sells advertising,
for example, might have to compete with a television network, even
though the two do not meaningfully compete for viewers. See
Filistrucchi 301. 10 The
plaintiffs argue that United States v. Topco Associates,
Inc. , 405 U. S. 596, 610 (1972), forbids any restraint
that would restrict competition in part of the market—here, for
example, merchant steering. See Brief for Petitioners and
Respondents Nebraska, Tennessee, and Texas 30, 42. Topco does not stand for such a broad proposition. Topco concluded
that a horizontal agreement between competitors was unreasonable per se , even though the agreement did not extend to
every competitor in the market. See 405 U. S., at 599, 608. A
horizontal agreement between competitors is markedly different from
a vertical agreement that incidentally affects one particular
method of competition. See Leegin , 551 U. S., at 888; Maricopa County Medical Soc. , 457 U. S., at 348,
n. 18. SUPREME COURT OF THE UNITED STATES

															_________________

															No. 16–1454

															_________________

															OHIO, et al., PETITIONERS v. AMERICAN EXPRESS COMPANY, et al.

															on writ of certiorari to the united states
court of appeals for the second circuit

															[June 25, 2018]

															Justice Breyer, with whom Justice Ginsburg,
Justice Sotomayor, and Justice Kagan join, dissenting.

															For more than 120 years, the American economy
has prospered by charting a middle path between pure lassez-faire and state capitalism, governed by an antitrust
law “dedicated to the principle that markets , not individual
firms and certainly not political power, produce the optimal
mixture of goods and services.” 1 P. Areeda & H. Hovenkamp,
Antitrust Law ¶100b, p. 4 (4th ed. 2013) (Areeda &
Hovenkamp). By means of a strong antitrust law, the United States
has sought to avoid the danger of monopoly capitalism. Long gone,
we hope, are the days when the great trusts presided unfettered by
competition over the American economy.

															This lawsuit is emblematic of the American
approach. Many governments around the world have responded to
concerns about the high fees that credit-card companies often
charge merchants by regulating such fees directly. See GAO, Credit
and Debit Cards: Federal Entities Are Taking Actions to Limit Their
Interchange Fees, but Additional Revenue Collection Cost Savings
May Exist 31–35 (GAO–08–558, 2008). The United States has not
followed that approach. The Government instead filed this lawsuit,
which seeks to restore market competition over credit-card merchant
fees by eliminating a contract-ual barrier with anticompetitive
effects. The majority rejects that effort. But because the
challenged contractual term clearly has serious anticompetitive
effects, I dissent.

															I

															I agree with the majority and the parties that
this case is properly evaluated under the three-step “rule of
reason” that governs many antitrust lawsuits. Ante, at 9–10.
Under that approach, a court looks first at the agreement or
restraint at issue to assess whether it has had, or is likely to
have, anticompetitive effects. FTC v. Indiana Federation
of Dentists , 476 U. S. 447, 459 (1986). In doing so, the
court normally asks whether the restraint may tend to impede
competition and, if so, whether those who have entered into that
restraint have sufficient economic or commercial power for the
agreement to make a negative difference. See id., at
459–461 . Sometimes, but not always, a court will try to
determine the appropriate market (the market that the agreement
affects) and determine whether those entering into that agreement
have the power to raise prices above the competitive level in that
market. See ibid. It is important here to understand that in cases
under §1 of the Sherman Act (unlike in cases challenging a merger
under §7 of the Clayton Act, 15 U. S. C. §18), it may
well be unnecessary to undertake a sometimes complex, market power
inquiry:

															“Since the purpose [in a Sherman Act §1
case] of the inquiries into . . . market power is
[simply] to determine whether an arrangement has the potential for
genuine adverse effects on competition, ‘proof of actual
detrimental effects, such as a reduction in output,’ can obviate
the need for an inquiry into market power, which is but a
‘surrogate for detrimental effects.’ ” Indiana Federation
of Dentists , supra , at 460–461 (quoting 7 P. Areeda,
Antitrust Law ¶1511, p. 429 (3d ed. 1986)).

															Second (as treatise writers summarize the case
law), if an antitrust plaintiff meets the initial burden of showing
that an agreement will likely have anticompetitive effects,
normally the “burden shifts to the defendant to show that the
restraint in fact serves a legitimate objective.” 7 Areeda &
Hovenkamp ¶1504b, at 415; see California Dental Assn. v. FTC , 526 U. S. 756, 771 (1999); id., at 788
(Breyer, J., dissenting).

															Third, if the defendant successfully bears this
burden, the antitrust plaintiff may still carry the day by showing
that it is possible to meet the legitimate objective in less
restrictive ways, or, perhaps by showing that the legitimate
objective does not outweigh the harm that competition will suffer, i.e. , that the agreement “on balance” remains unreasonable.
7 Areeda & Hovenkamp ¶1507a, at 442.

															Like the Court of Appeals and the parties, the
majority addresses only the first step of that three-step
framework. Ante, at 10.

															II

															A

															This case concerns the credit-card business.
As the majority explains, ante, at 2, that business involves
the selling of two different but related card services. First, when
a shopper uses a credit card to buy something from a participating
merchant, the credit-card company pays the merchant the amount of
money that the merchant’s customer has charged to his card and
charges the merchant a fee, say 5%, for that speedy-payment
service. I shall refer to that kind of transaction as a
merchant-related card service. Second, the credit-card company then
sends a bill to the merchant’s customer, the shopper who holds the
card; and the shopper pays the card company the sum that merchant
charged the shopper for the goods or services he or she bought. The
cardholder also often pays the card company a fee, such as an
annual fee for the card or an interest charge for delayed payment.
I shall call that kind of transaction a shopper-related card
service. The credit-card company can earn revenue from the sale
(directly or indirectly) of each of these services: (1) speedy
payment for merchants, and (2) credit for shoppers. (I say
“indirectly” to reflect the fact that card companies often create
or use networks of banks as part of the process—but I have found
nothing here suggesting that that fact makes a significant
difference to my analysis.)

															Sales of the two basic card services are
related. A shopper can pay for a purchase with a particular credit
card only if the merchant has signed up for merchant-related card
services with the company that issued the credit card that the
shopper wishes to use. A firm in the credit-card business is
therefore unlikely to make money unless quite a few merchants agree
to accept that firm’s card and quite a few shoppers agree to carry
and use it. In general, the more merchants that sign up with a
particular card company, the more useful that card is likely to
prove to shoppers and so the more shoppers will sign up; so too,
the more shoppers that carry a particular card, the more useful
that card is likely to prove to merchants (as it obviously helps
them obtain the shoppers’ business) and so the more merchants will
sign up. Moreover, as a rough rule of thumb (and assuming constant
charges), the larger the networks of paying merchants and paying
shoppers that a card firm maintains, the larger the revenues that
the firm will likely receive, since more payments will be processed
using its cards. Thus, it is not surprising that a card company may
offer shoppers incentives (say, points redeemable for merchandise
or travel) for using its card or that a firm might want merchants
to accept its card exclusively.

															B

															This case focuses upon a practice called
“steering.” American Express has historically charged higher
merchant fees than its competitors. App. to Pet. for Cert.
173a–176a. Hence, fewer merchants accept American Express’ cards
than its competitors’. Id., at 184a–187a. But, perhaps
because American Express cardholders are, on average, wealthier,
higher-spending, or more loyal to American Express than other
cardholders, vast numbers of merchants still accept American
Express cards. See id. , at 156a, 176a–177a, 184a–187a. Those
who do, however, would (in order to avoid the higher American
Express fee) often prefer that their customers use a different card
to charge a purchase. Thus, the merchant has a monetary incentive
to “steer” the customer towards the use of a different card. A
merchant might tell the customer, for example, “American Express
costs us more,” or “please use Visa if you can,” or “free shipping
if you use Discover.” See id., at 100a–102a.

															Steering makes a difference, because without it,
the shopper does not care whether the merchant pays more to
American Express than it would pay to a different card company—the
shopper pays the same price either way. But if steering works, then
American Express will find it more difficult to charge more than
its competitors for merchant-related services, because merchants
will respond by steering their customers, encouraging them to use
other cards. Thus, American Express dislikes steering; the
merchants like it; and the shoppers may benefit from it, whether
because merchants will offer them incentives to use less expensive
cards or in the form of lower retail prices overall. See id., at 92a, 97a–104a.

															In response to its competitors’ efforts to
convince merchants to steer shoppers to use less expensive cards,
American Express tried to stop, or at least to limit, steering by
placing antisteering provisions in most of its contracts with
merchants. It called those provisions “nondiscrimination
provisions.” They prohibited steering of the forms I have described
above (and others as well). See id., at 95a–96a, 100a–101a.
After placing them in its agreements, American Express found it
could maintain, or even raise, its higher merchant prices without
losing too many transactions to other firms. Id., at
195a–198a. These agreements—the “nondiscrimination provisions”—led
to this lawsuit.

															C

															In 2010 the United States and 17 States
brought this antitrust case against American Express. They claimed
that the “nondiscrimination provisions” in its contracts with
merchants created an unreasonable restraint of trade. (Initially
Visa and MasterCard were also defendants, but they entered into
consent judgments, dropping similar provisions from their contracts
with merchants). After a 7-week bench trial, the District Court
entered judgment for the Government, setting forth its findings of
fact and conclusions of law in a 97-page opinion.
88 F. Supp. 3d 143 (EDNY 2015).

															Because the majority devotes little attention to
the District Court’s detailed factual findings, I will summarize
some of the more significant ones here. Among other things, the
District Court found that beginning in 2005 and during the next
five years, American Express raised the prices it charged merchants
on 20 separate occasions. See id., at 195–196. In doing so,
American Express did not take account of the possibility that large
merchants would respond to the price increases by encouraging
shoppers to use a different credit card because the
nondiscrimination provisions prohibited any such steering. Id., at 215. The District Court pointed to merchants’
testimony stating that, had it not been for those provisions, the
large merchants would have responded to the price increases by
encouraging customers to use other, less-expensive cards. Ibid. The District Court also found that even though
American Express raised its merchant prices 20 times in this 5-year
period, it did not lose the business of any large merchant. Id., at 197. Nor did American Express increase benefits (or
cut credit-card prices) to American Express cardholders in tandem
with the merchant price increases. Id., at 196. Even had
there been no direct evidence of injury to competition, American
Express’ ability to raise merchant prices without losing any
meaningful market share, in the District Court’s view, showed that
American Express possessed power in the relevant market. See id. , at 195.

															The District Court also found that, in the
absence of the provisions, prices to merchants would likely have
been lower. Ibid. It wrote that in the late 1990’s,
Discover, one of American Express’ competitors, had tried to
develop a business model that involved charging lower prices to
merchants than the other companies charged. Id., at 213.
Discover then invited each “merchant to save money by shifting
volume to Discover,” while simultaneously offering merchants
additional discounts “if they would steer customers to Discover.” Ibid. The court determined that these efforts failed because
of American Express’ (and the other card companies’)
“nondiscrimination provisions.” These provisions, the court found,
“denied merchants the ability to express a preference for Discover
or to employ any other tool by which they might steer share to
Discover’s lower-priced network.” Id., at 214. Because the
provisions eliminated any advantage that lower prices might
produce, Discover “abandoned its low-price business model” and
raised its merchant fees to match those of its competitors. Ibid. This series of events, the court concluded was
“emblematic of the harm done to the competitive process” by the
“nondiscrimination provisions.” Ibid. The District Court added that it found no
offsetting pro-competitive benefit to shoppers. Id., at
225–238. Indeed, it found no offsetting benefit of any kind. See ibid. American Express appealed, and the U. S.
Court of Appeals for the Second Circuit held in its favor. 838
F. 3d 179 (2016). The Court of Appeals did not reject any fact
found by the District Court as “clearly erroneous.” See Fed. Rule
Civ. Proc. 52(a)(6). Rather, it concluded that the District Court
had erred in step 1 of its rule-of-reason analysis by failing to
account for what the Second Circuit called the credit-card
business’s “two-sided market” (or “two-sided platform”). 838
F. 3d, at 185–186, 196–200.

															III

															The majority, like the Court of Appeals,
reaches only step 1 in its “rule of reason” analysis. Ante, at 10. To repeat, that step consists of determining whether the
challenged “nondiscrimination provisions” have had, or are likely
to have, anticompetitive effects. See Indiana Federation of
Dentists , 476 U. S., at 459. Do those provisions tend to
impede competition? And if so, does American Express, which imposed
that restraint as a condition of doing business with its merchant
customers, have sufficient economic or commercial power for the
provision to make a negative difference? See id., at
460–461.

															A

															Here the District Court found that the
challenged provisions have had significant anticompetitive effects.
In particular, it found that the provisions have limited or
prevented price competition among credit-card firms for the
business of merchants. 88 F. Supp. 3d, at 209. That
conclusion makes sense: In the provisions, American Express
required the merchants to agree not to encourage customers to use
American Express’ competitors’ credit cards, even cards from those
competitors, such as Discover, that intended to charge the
merchants lower prices. See id., at 214. By doing so,
American Express has “disrupt[ed] the normal price-setting
mechanism” in the market. Id., at 209. As a result of the
provisions, the District Court found, American Express was able to
raise merchant prices repeatedly without any significant loss of
business, because merchants were unable to respond to such price
increases by encouraging shoppers to pay with other cards. Id., at 215. The provisions also meant that competitors like
Discover had little incentive to lower their merchant prices,
because doing so did not lead to any additional market share. Id., at 214. The provisions thereby “suppress[ed] [American
Express’] . . . competitors’ incentives to offer lower
prices . . . resulting in higher profit-maximizing prices
across the network services market.” Id. , at 209 . Consumers throughout the economy paid higher retail prices as a
result, and they were denied the opportunity to accept incentives
that merchants might otherwise have offered to use less-expensive
cards. Id., at 216, 220. I should think that, considering
step 1 alone, there is little more that need be said.

															The majority, like the Court of Appeals, says
that the District Court should have looked not only at the market
for the card companies’ merchant-related services but also at the
market for the card companies’ shopper-related services, and that
it should have combined them, treating them as a single market. Ante, at 14–15; 838 F. 3d, at 197. But I am not aware
of any support for that view in antitrust law. Indeed, this Court
has held to the contrary.

															In Times-Picayune Publishing Co. v. United States , 345 U. S. 594, 610 (1953), the Court
held that an antitrust court should begin its definition of a
relevant market by focusing narrowly on the good or service
directly affected by a challenged restraint. The Government in that
case claimed that a newspaper’s advertising policy violated the
Sherman Act’s “rule of reason.” See ibid. In support of that
argument, the Government pointed out, and the District Court had
held, that the newspaper dominated the market for the sales of
newspapers to readers in New Orleans, where it was the sole morning
daily newspaper. Ibid. But this Court reversed. We explained
that “every newspaper is a dual trader in separate though
interdependent markets; it sells the paper’s news and advertising
content to its readers; in effect that readership is in turn sold
to the buyers of advertising space.” Ibid. We then
added:

															“This case concerns solely one of those
markets. The Publishing Company stands accused not of tying sales
to its readers but only to buyers of general and classified space
in its papers. For this reason, dominance in the advertising
market, not in readership, must be decisive in gauging the legality
of the Company’s unit plan.” Ibid. Here, American Express stands accused not of
limiting or harming competition for shopper-related card services,
but only of merchant-related card services, because the challenged
contract provisions appear only in American Express’ contracts with
merchants. That is why the District Court was correct in
considering, at step 1, simply whether the agreement had diminished
competition in merchant-related services.

															B

															The District Court did refer to market
definition, and the majority does the same. Ante, at 11–15.
And I recognize that properly defining a market is often a complex
business. Once a court has identified the good or service directly
restrained, as Times-Picayune Publishing Co. requires, it
will sometimes add to the relevant market what economists call
“substitutes”: other goods or services that are reasonably
substitutable for that good or service. See, e.g., United States v . E. I. du Pont de Nemours &
Co. , 351 U. S. 377, 395–396 (1956) (explaining that
cellophane market includes other, substitutable flexible wrapping
materials as well). The reason that substitutes are included in the
relevant market is that they restrain a firm’s ability to
profitably raise prices, because customers will switch to the
substitutes rather than pay the higher prices. See 2B Areeda &
Hovenkamp ¶561, at 378.

															But while the market includes substitutes, it
does not include what economists call complements: goods or
services that are used together with the restrained product, but
that cannot be substituted for that product. See id., ¶565a,
at 429; Eastman Kodak Co. v. Image Technical Services,
Inc. , 504 U. S. 451, 463 (1992). An example of complements
is gasoline and tires. A driver needs both gasoline and tires to
drive, but they are not substitutes for each other, and so the sale
price of tires does not check the ability of a gasoline firm (say a
gasoline monopolist) to raise the price of gasoline above
competitive levels. As a treatise on the subject states: “Grouping
complementary goods into the same market” is “economic nonsense,”
and would “undermin[e] the rationale for the policy against
monopolization or collusion in the first place.” 2B Areeda &
Hovenkamp ¶565a, at 431 . Here, the relationship between merchant-related
card services and shopper-related card services is primarily that
of complements, not substitutes. Like gasoline and tires, both must
be purchased for either to have value. Merchants upset about a
price increase for merchant-related services cannot avoid that
price increase by becoming cardholders, in the way that, say, a
buyer of newspaper advertising can switch to television advertising
or direct mail in response to a newspaper’s advertising price
increase. The two categories of services serve fundamentally
different purposes. And so, also like gasoline and tires, it is
difficult to see any way in which the price of shopper-related
services could act as a check on the card firm’s sale price of
merchant-related services. If anything, a lower price of
shopper-related card services is likely to cause more shoppers to
use the card, and increased shopper popularity should make it easier for a card firm to raise prices to merchants, not harder , as would be the case if the services were
substitutes . Thus, unless there is something unusual about
this case—a possibility I discuss below, see infra, at
13–20—there is no justification for treating shopper-related
services and merchant-related services as if they were part of a
single market, at least not at step 1 of the “rule of reason.”

															C

															Regardless, a discussion of market definition
was legally unnecessary at step 1. That is because the District
Court found strong direct evidence of anticompetitive
effects flowing from the challenged restraint. 88
F. Supp. 3d, at 207–224. As I said, supra, at
7 , this evidence included Discover’s efforts to break into
the credit-card business by charging lower prices for
merchant-related services, only to find that the “nondiscrimination
provisions,” by preventing merchants from encouraging shoppers to
use Discover cards, meant that lower merchant prices did not result
in any additional transactions using Discover credit cards. 88
F. Supp. 3d , at 213–214. The direct evidence also
included the fact that American Express raised its merchant prices
20 times in five years without losing any appreciable market share. Id., at 195–198, 208–212. It also included the testimony of
numerous merchants that they would have steered shoppers away from
American Express cards in response to merchant price increases
(thereby checking the ability of American Express to raise prices)
had it not been for the nondiscrimination provisions. See id., at 221–222. It included the factual finding that
American Express “did not even account for the possibility that
[large] merchants would respond to its price increases by
attempting to shift share to a competitor’s network” because the
nondiscrimination provisions prohibited steering. Id., at
215. It included the District Court’s ultimate finding of fact, not
overturned by the Court of Appeals, that the challenged provisions
“were integral to” American Express’ “[price] increases and thereby
caused merchants to pay higher prices.” Ibid. As I explained above, this Court has stated that
“[s]ince the purpose of the inquiries into market definition and
market power is to determine whether an arrangement has the
potential for genuine adverse effects on competition, proof of
actual detrimental effects . . . can obviate the
need for” those inquiries. Indiana Federation of Dentists ,
476 U. S., at 460–461 (internal quotation marks omitted). That
statement is fully applicable here. Doubts about the District
Court’s market-definition analysis are beside the point in the face
of the District Court’s findings of actual anticompetitive
harm.

															The majority disagrees that market definition is
irrelevant. See ante, at 11–12, and n. 7. The majority
explains that market definition is necessary because the
nondiscrimination provisions are “vertical restraints” and
“[v]ertical restraints often pose no risk to competition unless the
entity imposing them has market power, which cannot be evaluated
unless the Court first determines the relevant market.” Ante, at 11, n. 7. The majority thus, in a footnote,
seems categorically to exempt vertical restraints from the ordinary
“rule of reason” analysis that has applied to them since the
Sherman Act’s enactment in 1890. The majority’s only support for
this novel exemption is Leegin Creative Leather Products,
Inc. v. PSKS, Inc. , 551 U. S. 877 (2007). But Leegin held that the “rule of reason” applied to the
vertical restraint at issue in that case. See id., at
898–899. It said nothing to suggest that vertical restraints are
not subject to the usual “rule of reason” analysis. See also infra , at 24.

															One critical point that the majority’s argument
ignores is that proof of actual adverse effects on competition is , a fortiori , proof of market power. Without
such power, the restraints could not have brought about the
anticompetitive effects that the plaintiff proved. See Indiana
Federation of Dentists , supra, at 460 (“[T]he purpose of
the inquiries into market definition and market power is to
determine whether an arrangement has the potential for genuine adverse effects on competition” (emphasis added)). The
District Court’s findings of actual anticompetitive harm from the
nondiscrimination provisions thus showed that, whatever the
relevant market might be, American Express had enough power in that
market to cause that harm. There is no reason to require a separate
showing of market definition and market power under such
circumstances. And so the majority’s extensive discussion of market
definition is legally unnecessary.

															D

															The majority’s discussion of market definition
is also wrong. Without raising any objection in general with the
longstanding approach I describe above, supra , at 10–11, the
majority agrees with the Court of Appeals that the market for
American Express’ card services is special because it is a
“two-sided transaction platform.” Ante, at 2–5, 12–15. The
majority explains that credit-card firms connect two distinct
groups of customers: First, merchants who accept credit cards, and
second, shoppers who use the cards. Ante, at 2; accord, 838
F. 3d, at 186. The majority adds that “no credit-card
transaction can occur unless both the merchant and the cardholder
simultaneously agree to use to the same credit-card network.” Ante, at 3. And it explains that the credit-card market
involves “indirect network effects,” by which it means that
shoppers want a card that many merchants will accept and merchants
want to accept those cards that many customers have and use. Ibid. From this, the majority concludes that “courts must
include both sides of the platform—merchants and cardholders—when
defining the credit-card market.” Ante, at 12; accord, 838
F. 3d, at 197.

															1

															Missing from the majority’s analysis is any
explanation as to why , given the purposes that market
definition serves in antitrust law, the fact that a credit-card
firm can be said to operate a “two-sided transaction platform”
means that its merchant-related and shopper-related services should
be combined into a single market. The phrase “two-sided transaction
platform” is not one of antitrust art—I can find no case from this
Court using those words. The majority defines the phrase as
covering a business that “offers different products or services to
two different groups who both depend on the platform to
intermediate between them,” where the business “cannot make a sale
to one side of the platform without simultaneously making a sale to
the other” side of the platform. Ante, at 2. I take from
that definition that there are four relevant features of such
businesses on the majority’s account: they (1) offer different
products or services, (2) to different groups of customers, (3)
whom the “platform” connects, (4) in simultaneous transactions. See ibid. What is it about businesses with those four
features that the majority thinks justifies a special
market-definition approach for them? It cannot be the first two
features—that the company sells different products to different
groups of customers. Companies that sell multiple products to
multiple types of customers are commonplace. A firm might mine for
gold, which it refines and sells both to dentists in the form of
fillings and to investors in the form of ingots. Or, a firm might
drill for both oil and natural gas. Or a firm might make both
ignition switches inserted into auto bodies and tires used for
cars. I have already explained that, ordinarily, antitrust law will
not group the two nonsubstitutable products together for step 1
purposes. Supra, at 10–11.

															Neither should it normally matter whether a
company sells related, or complementary, products, i.e. ,
products which must both be purchased to have any function, such as
ignition switches and tires, or cameras and film. It is well
established that an antitrust court in such cases looks at the
product where the attacked restraint has an anticompetitive effect. Supra, at 9; see Eastman Kodak , 504 U. S., at
463. The court does not combine the customers for the separate,
nonsubstitutable goods and see if “overall” the restraint has a
negative effect. See ibid. ; 2B Areeda & Hovenkamp ¶565a.
That is because, as I have explained, the complementary
relationship between the products is irrelevant to the purposes of
market-definition. See s upra, at 10–11.

															The majority disputes my characterization of
merchant-related and shopper-related services as “complements.” See ante, at 14, n. 8. The majority relies on an academic
article which devotes one sentence to the question, saying that “a
two-sided market [is] different from markets for complementary
products [ e.g., tires and gas], in which both products are
bought by the same buyers, who, in their buying decisions, can
therefore be expected to take into account both prices.”
Filistrucchi, Geradin, Van Damme, & Affeldt, Market Definition
in Two-Sided Markets: Theory and Practice, 10 J. Competition L.
& Econ. 293, 297 (2014) (Filistrucchi). I agree that two-sided
platforms—at least as some academics define them, but see infra , at 19–20—may be distinct from some types of
complements in the respect the majority mentions (even though the
services resemble complements because they must be used together
for either to have value). But the distinction the majority
mentions has nothing to do with the relevant question. The relevant
question is whether merchant-related and shopper-related services
are substitutes , one for the other, so that customers can
respond to a price increase for one service by switching to the
other service. As I have explained, the two types of services are
not substitutes in this way. Supra, at 11–12. And so the
question remains, just as before: What is it about the economic
relationship between merchant-related and shopper-related services
that would justify the majority’s novel approach to market
definition?

															What about the last two features—that the
company connects the two groups of customers to each other, in
simultaneous transactions? That, too, is commonplace. Consider a
farmers’ market. It brings local farmers and local shoppers
together, and transactions will occur only if a farmer and a
shopper simultaneously agree to engage in one. Should courts
abandon their ordinary step 1 inquiry if several competing farmers’
markets in a city agree that only certain kinds of farmers can
participate, or if a farmers’ market charges a higher fee than its
competitors do and prohibits participating farmers from raising
their prices to cover it? Why? If farmers’ markets are special,
what about travel agents that connect airlines and passengers? What
about internet retailers, who, in addition to selling their own
goods, allow (for a fee) other goods-producers to sell over their
networks? Each of those businesses seems to meet the majority’s
four-prong definition.

															Apparently as its justification for applying a
special market-definition rule to “two-sided transaction
platforms,” the majority explains that such platforms “often
exhibit” what it calls “indirect network effects.” Ante, at
3. By this, the majority means that sales of merchant-related card
services and (different) shopper-related card services are
interconnected, in that increased merchant-buyers mean increased
shopper-buyers (the more stores in the card’s network, the more
customers likely to use the card), and vice versa. See ibid. But this, too, is commonplace. Consider, again, a farmers’ market.
The more farmers that participate (within physical and esthetic
limits), the more customers the market will likely attract, and
vice versa. So too with travel agents: the more airlines whose
tickets a travel agent sells, the more potential passengers will
likely use that travel agent, and the more potential passengers
that use the travel agent, the easier it will likely be to convince
airlines to sell through the travel agent. And so forth. Nothing in
antitrust law, to my knowledge, suggests that a court, when
presented with an agreement that restricts competition in any one
of the markets my examples suggest, should abandon traditional
market-definition approaches and include in the relevant market
services that are complements, not substitutes, of the restrained
good. See supra, at 10–11.

															2

															To justify special treatment for “two-sided
transaction platforms,” the majority relies on the Court’s decision
in United States v. Grinnell Corp. , 384 U. S.
563, 571–572 (1966). In Grinnell , the Court treated as a
single market several different “central station services,”
including burglar alarm services and fire alarm services. Id., at 571. It did so even though, for consumers ,
“burglar alarm services are not interchangeable with fire alarm
services.” Id ., at 572. But that is because, for producers , the services were indeed interchangeable: A
company that offered one could easily offer the other, because they
all involve “a single basic service—the protection of property
through use of a central service station.” Ibid. Thus, the
“commercial realit[y]” that the Grinnell Court relied on, ibid. , was that the services being grouped were what
economists call “producer substitutes.” See 2B Areeda &
Hovenkamp ¶561, at 378. And the law is clear that “two products
produced interchangeably from the same production facilities are
presumptively in the same market,” even if they are not “close
substitutes for each other on the demand side.” Ibid. That
is because a firm that produces one such product can, in response
to a price increase in the other, easily shift its production and
thereby limit its compet- itor’s power to impose the higher price.
See id. , ¶561a, at 379.

															Unlike the various types of central station
services at issue in Grinnell Corp ., however, the
shopper-related and merchant-related services that American Express
provides are not “producer substitutes” any more than they are
traditional substitutes. For producers as for consumers, the
services are instead complements. Credit card companies must sell
them together for them to be useful. As a result, the credit-card
companies cannot respond to, say, merchant-related price increases
by shifting production away from shopper-related services to
merchant-related services. The relevant “commercial realities” in
this case are thus completely different from those in Grinnell
Corp. (The majority also cites Brown Shoe Co. v. United States , 370 U. S. 294, 336–337 (1962), for this
point, but the “commercial realities” considered in that case were
that “shoe stores in the outskirts of cities compete effectively
with stores in central downtown areas,” and thus are part of the
same market. Id., at 338–339. Here, merchant-related
services do not, as I have said, compete with shopper-related
services, and so Brown Shoe Co. does not support the
majority’s position.) Thus, our precedent provides no support for
the majority’s special approach to defining markets involving
“two-sided transaction platforms.”

															3

															What about the academic articles the majority
cites? The first thing to note is that the majority defines
“two-sided transaction platforms” much more broadly than the
economists do. As the economists who coined the term explain, if a
“two-sided market” meant simply that a firm connects two different
groups of customers via a platform, then “pretty much any market
would be two-sided, since buyers and sellers need to be brought
together for markets to exist and gains from trade to be realized.”
Rochet & Tirole, Two-Sided Markets: A Progress Report, 37 RAND
J. Econ. 645, 646 (2006). The defining feature of a “two-sided
market,” according to these economists, is that “the platform can
affect the volume of transactions by charging more to one side of
the market and reducing the price paid by the other side by an
equal amount.” Id., at 664–665; accord, Filistrucchi 299.
That requirement appears nowhere in the majority’s definition. By
failing to limit its definition to platforms that economists would
recognize as “two sided” in the relevant respect, the majority
carves out a much broader exception to the ordinary antitrust rules
than the academic articles it relies on could possibly support.

															Even as limited to the narrower definition that
economists use, however, the academic articles the majority cites
do not support the majority’s flat rule that firms operating
“two-sided transaction platforms” should always be treated as part
of a single market for all antitrust purposes. Ante, at
13–15. Rather, the academics explain that for market-definition
purposes, “[i]n some cases, the fact that a business can be thought
of as two-sided may be irrelevant,” including because “nothing in
the analysis of the practices [at issue] really hinges on the
linkages between the demands of participating groups.” Evans &
Schmalensee, Markets With Two-Sided Platforms, 1 Issues in
Competition L. & Pol’y 667, 689 (2008). “In other cases, the
fact that a business is two-sided will prove important both by
identifying the real dimensions of competition and focusing on
sources of constraints.” Ibid. That flexible approach,
however, is precisely the one the District Court followed in this
case, by considering the effects of “[t]he two-sided nature of the
. . . card industry” throughout its analysis. 88
F. Supp. 3d, at 155.

															Neither the majority nor the academic articles
it cites offer any explanation for why the features of a “two-sided
transaction platform” justify always treating it as a single
antitrust market, rather than accounting for its economic features
in other ways, as the District Court did. The article that the
majority repeatedly quotes as saying that “ ‘[i]n two-sided
transaction markets, only one market should be defined,’ ” ante, at 14–15 (quoting Filistrucchi 302), justifies that
conclusion only for purposes of assessing the effects of a merger.
In such a case, the article explains, “[e]veryone would probably
agree that a payment card company such as American Express is
either in the relevant market on both sides or on neither side
. . . . The analysis of a merger between two payment
card platforms should thus consider . . . both sides of
the market.” Id., at 301. In a merger case this makes sense,
but is also meaningless, because, whether there is one market or
two, a reviewing court will consider both sides, because it must
examine the effects of the merger in each affected market and
submarket. See Brown Shoe Co. , 370 U. S., at 325. As
for a nonmerger case, the article offers only United States v. Grinnell as a justification, see Filistrucchi 303, and as
I have already explained, supra, at 16–18, Grinnell does not support this proposition.

															E

															Put all of those substantial problems with the
majority’s reasoning aside, though. Even if the majority were right
to say that market definition was relevant, and even if the
majority were right to further say that the District Court should
have defined the market in this case to include shopper-related
services as well as merchant-related services, that still would not justify the majority in affirming the Court of Appeals.
That is because, as the majority is forced to admit, the plaintiffs made the factual showing that the majority thinks is
required. See ante, at 17.

															Recall why it is that the majority says that
market definition matters: because if the relevant market includes
both merchant-related services and card-related services, then the
plaintiffs had the burden to show that as a result of the
nondiscrimination provisions, “the price of credit-card
transactions”—considering both fees charged to merchants and
rewards paid to cardholders—“was higher than the price one would
expect to find in a competitive market.” Ante, at 16. This
mirrors the Court of Appeals’ holding that the Government had to
show that the “nondiscrimination provisions” had “made all [American Express] customers on both sides of the
platform— i.e. , both merchants and cardholders—worse off
overall.” 838 F. 3d, at 205.

															The problem with this reasoning, aside from it
being wrong, is that the majority admits that the plaintiffs did show this: they “offer[ed] evidence” that American
Express “increased the percentage of the purchase price that it
charges merchants . . . and that this increase was not
entirely spent on cardholder rewards.” Ante, 17 (citing 88
F. Supp. 3d, at 195–197, 215). Indeed, the plaintiffs did
not merely “offer evidence” of this—they persuaded the District
Court, which made an unchallenged factual finding that the merchant
price increases that resulted from the nondiscrimination provisions
“were not wholly offset by additional rewards expenditures or
otherwise passed through to cardholders, and resulted in a
higher net price. ” Id ., at 215 (emphasis added).

															In the face of this problem, the majority
retreats to saying that even net price increases do not matter
after all, absent a showing of lower output, because if output is
increasing, “ ‘rising prices are equally consistent with
growing product demand.’ ” Ante, at 18 (quoting Brooke Group Ltd. v. Brown & Williamson Tobacco
Corp. , 509 U. S. 209, 237 (1993)). This argument, unlike
the price argument, has nothing to do with the credit-card market
being a “two-sided transaction platform,” so if this is the basis
for the majority’s holding, then nearly all of the opinion is
dicta. The argument is also wrong. It is true as an economic matter
that a firm exercises market power by restricting output in order
to raise prices. But the relevant restriction of output is as
compared with a hypothetical world in which the restraint was not
present and prices were lower. The fact that credit-card use in
general has grown over the last decade, as the majority says, see ante, at 17–18, says nothing about whether such use would
have grown more or less without the nondiscrimination provisions.
And because the relevant question is a comparison between reality
and a hypothetical state of affairs, to require actual proof of
reduced output is often to require the impossible—tantamount to
saying that the Sherman Act does not apply at all.

															In any event, there are features of the
credit-card market that may tend to limit the usual relationship
between price and output. In particular, merchants generally spread
the costs of credit-card acceptance across all their customers
(whatever payment method they may use), while the benefits of card
use go only to the cardholders. See, e.g., 88
F. Supp. 3d, at 216; Brief for John M. Connor et al.
as Amici Curiae 34–35. Thus, higher credit-card merchant
fees may have only a limited effect on credit-card transaction
volume, even as they disrupt the marketplace by extracting
anticompetitive profits.

															IV

															A

															For the reasons I have stated, the Second
Circuit was wrong to lump together the two different services sold, at step 1. But I recognize that the Court of Appeals has not
yet considered whether the relationship between the two services
might make a difference at steps 2 and 3. That is to say, American
Express might wish to argue that the nondiscrimination provisions,
while anticompetitive in respect to merchant-related services,
nonetheless have an adequate offsetting procompetitive benefit in
respect to its shopper-related services. I believe that American
Express should have an opportunity to ask the Court of Appeals to
consider that matter.

															American Express might face an uphill battle. A
Sherman Act §1 defendant can rarely, if ever, show that a
pro-competitive benefit in the market for one product offsets an
anticompetitive harm in the market for another. In United
States v. Topco Associates, Inc. , 405 U. S. 596,
611 (1972), this Court wrote:

															“If a decision is to be made to sacrifice
competition in one portion of the economy for greater competition
in another portion, this . . . is a decision that must be
made by Congress and not by private forces or by the courts.
Private forces are too keenly aware of their own interests in
making such decisions and courts are ill-equipped and ill-situated
for such decisionmaking.”

															American Express, pointing to vertical
price-fixing cases like our decision in Leegin , argues that
comparing competition-related pros and cons is more common than I
have just suggested. See 551 U. S., at 889–892. But Leegin held only that vertical price fixing is subject to
the “rule of reason” instead of being per se unlawful;
the “rule of reason” still applies to vertical agreements just as
it applies to horizontal agreements. See id., at
898–899.

															Moreover, the procompetitive justifications for
vertical price-fixing agreements are not apparently applicable to
the distinct types of restraints at issue in this case. A
vertically imposed price-fixing agreement typically involves a
manufacturer controlling the terms of sale for its own product. A
television-set manufacturer, for example, will insist that its
dealers not cut prices for the manufacturer’s own televisions below
a particular level. Why might a manufacturer want its dealers to
refrain from price competition in the manufacturer’s own products?
Perhaps because, for example, the manufacturer wants to encourage
the dealers to develop the market for the manufacturer’s brand,
thereby increasing interbrand competition for the same
ultimate product, namely a television set. This type of reasoning
does not appear to apply to American Express’ nondiscrimination
provisions, which seek to control the terms on which merchants
accept other brands’ cards, not merely American Express’
own.

															Regardless, I would not now hold that an
agreement such as the one before us can never be justified by
procompetitive benefits of some kind. But the Court of Appeals
would properly consider procompetitive justifications not at step
1, but at steps 2 and 3 of the “rule of reason” inquiry. American
Express would need to show just how this particular anticompetitive
merchant-related agreement has procompetitive benefits in the
shopper-related market. In doing so, American Express would need to
overcome the District Court’s factual findings that the agreement
had no such effects. See 88 F. Supp. 3d, at 224–238.

															B

															The majority charts a different path.
Notwithstanding its purported acceptance of the three-step,
burden-shifting framework I have described, ante, at 9–10,
the majority addresses American Express’ procompetitive
justifications now, at step 1 of the analysis, see ante, at
18–20. And in doing so, the majority inexplicably ignores the
District Court’s factual findings on the subject.

															The majority reasons that the challenged
nondiscrimination provisions “stem negative externalities in the
credit-card market and promote interbrand competition.” Ante, at 19. The “negative externality” the majority has in
mind is this: If one merchant persuades a shopper not to use his
American Express card at that merchant’s store, that shopper
becomes less likely to use his American Express card at other
merchants’ stores. Ibid . The majority worries that this
“endangers the viability of the entire [American Express] network,” ibid. , but if so that is simply a consequence of American
Express’ merchant fees being higher than a competitive market will
support. “The antitrust laws were enacted for ‘the protection of competition, not competitors. ’ ” Atlantic
Richfield Co. v. USA Petroleum Co. , 495 U. S. 328,
338 (1990). If American Express’ merchant fees are so high that
merchants successfully induce their customers to use other cards,
American Express can remedy that problem by lowering those fees or
by spending more on cardholder rewards so that cardholders decline
such requests. What it may not do is demand contractual protection
from price competition.

															In any event, the majority ignores the fact that
the District Court, in addition to saying what I have just said,
also rejected this argument on independent factual grounds. It
explained that American Express “presented no expert testimony,
financial analysis, or other direct evidence establishing that
without its [nondiscrimination provisions] it will, in fact, be
unable to adapt its business to a more competitive market.” 88
F. Supp. 3d, at 231. It further explained that the
testimony that was provided on the topic “was notably
inconsistent,” with some of American Express’ witnesses saying only
that invalidation of the provisions “would require American Express
to adapt its current business model.” Ibid. After an
extensive discussion of the record, the District Court found that
“American Express possesses the flexibility and expertise necessary
to adapt its business model to suit a market in which it is
required to compete on both the cardholder and merchant sides of
the [credit-card] platform.” Id., at 231–232. The majority
evidently rejects these factual findings, even though no one has
challenged them as clearly erroneous.

															Similarly, the majority refers to the
nondiscrimination provisions as preventing “free riding” on
American Express’ “investments in rewards” for cardholders. Ante, at 19–20; see also ante, at 7 (describing
steering in terms suggestive of free riding). But as the District
Court explained, “[p]lainly . . . investments tied to
card use (such as Membership Rewards points, purchase protection,
and the like) are not subject to free-riding, since the network
does not incur any cost if the cardholder is successfully steered
away from using his or her American Express card.” 88
F. Supp. 3d , at 237. This, I should think, is an
unassailable conclusion: American Express pays rewards to
cardholders only for transactions in which cardholders use their
American Express cards, so if a steering effort succeeds, no
rewards are paid. As for concerns about free riding on American
Express’ fixed expenses, including its investments in its brand,
the District Court acknowledged that free-riding was in theory
possible, but explained that American Express “ma[de] no effort to
identify the fixed expenses to which its experts referred or to
explain how they are subject to free riding.” Ibid. ; see
also id., at 238 (American Express’ own data showed “that
the network’s ability to confer a credentialing benefit trails that
of its competitors, casting doubt on whether there is in fact any
particular benefit associated with accepting [American Express]
that is subject to free riding”). The majority does not even
acknowledge, much less reject, these factual findings, despite
coming to the contrary conclusion.

															Finally, the majority reasons that the
nondiscrimination provisions “do not prevent Visa, MasterCard, or
Discover from competing against [American Express] by offering
lower merchant fees or promoting their broader merchant
acceptance.” Ante, at 20. But again, the District Court’s
factual findings were to the contrary. As I laid out above, the
District Court found that the nondiscrimination provisions in
fact did prevent Discover from pursuing a
low-merchant-fee business model, by “den[ying] merchants the
ability to express a preference for Discover or to employ any other
tool by which they might steer share to Discover’s lower-priced
network.” 88 F. Supp. 3d, at 214; see supra, at 7.
The majority’s statements that the nondiscrimination provisions are
procompetitive are directly contradicted by this and other factual
findings.

															*  *  *

															For the reasons I have explained, the
majority’s decision in this case is contrary to basic principles of
antitrust law, and it ignores and contradicts the District Court’s
detailed factual findings, which were based on an extensive trial
record. I respectfully dissent.

Summary: The Supreme Court ruled that American Express' antisteering provisions, which prohibit merchants from discouraging customers from using their Amex cards, do not violate federal antitrust law. The Court acknowledged that credit cards have become a primary method of payment in the US and that credit-card companies operate a "two-sided platform," offering different services to cardholders and merchants. The Court considered the impact of Amex's antisteering provisions on competition and concluded that they do not prevent competitors from offering lower merchant fees or promoting broader merchant acceptance. This decision upholds Amex's business model and its ability to attract cardholders and merchants.