Loyalty Discounts after American Express: Price, Foreclosure, and Platform-Wide Effects in Two-Sided Transaction Platforms

I. Introduction

Loyalty discounts are often viewed as a common and procompetitive pricing practice through which sellers reward repeat customers, lower effective prices, and compete for available demand. Loyalty discounts can wear different hats: they may function as ordinary price competition, conditional pricing that encourages customers to concentrate their purchases, or de facto exclusivity when meaningful switching becomes economically irrational.1

Courts have often assessed loyalty discounts under two frameworks: a price-cost framework based on predatory pricing doctrine and a foreclosure-analysis framework based on exclusive-dealing doctrine. When low prices cause exclusionary harm, courts may apply predatory pricing principles like the price-cost test in Brooke Group Ltd. v. Brown & Williamson Tobacco Corp. and the discount attribution test for bundled discounts in Cascade Health Solutions v. PeaceHealth.2 Predatory pricing cases like Brooke Group and PeaceHealth reflect courts’ concern with error costs because low prices are the “very essence of competition,” and finding competitive harm from discounting without proof of below-cost pricing and a dangerous probability of recoupment can risk false positives that “chill the very conduct the antitrust laws are designed to protect.”3 If an equally efficient competitor can match the defendant’s price without pricing below cost, however, the resulting loss of sales is generally treated as competition on the merits.4

Loyalty discounts can also function as exclusionary restraints even where prices remain above cost. Cases such as LePage’s Inc. v. 3M, ZF Meritor, LLC v. Eaton Corp., and McWane, Inc. v. FTC show that above-cost pricing does not necessarily preclude liability when the challenged arrangements function more like de facto exclusive dealing, where the asserted competitive harm did not come solely from price sacrifice, but also from foreclosure of the scale, distribution, or customer access necessary for rivals to compete effectively.5 The parallel existence of price-cost and foreclosure-analysis frameworks suggests that courts are still contending with when loyalty discounts should be screened through price-cost tests and when they should be assessed under a foreclosure-based analysis.

The conflict between the two frameworks is especially notable in the context of two-sided transaction platforms. In Ohio v. American Express Co. (“Amex”), the Supreme Court held that platforms that facilitate simultaneous transactions between two distinct user groups sell a single, jointly consumed product: the transaction itself.6 Because participation on each side is interdependent, competitive effects in those markets must be assessed at the platform level by accounting for cross-side feedback effects.7 The Court further warned that focusing on prices charged to only one side may lead to false positives, or “mistaken inferences . . . that chill the very conduct the antitrust laws are designed to protect,” by condemning procompetitive price rebalancing that increases total platform output.8

Because a two-sided transaction platform’s product is the transaction, exclusion on one side of a two-sided transaction platform may do more than deny rivals access to a set of customers; it may reduce rivals’ access to the matched transactions necessary to achieve scale, particularly where indirect network effects and “chicken-and-egg” barriers make entry difficult.9 Recent cases and commentary suggest that even partial foreclosure on one side of a transaction platform may have “amplifie[d]” competitive consequences when a rival cannot secure enough participation on both sides of the platform to become competitive.10

Courts have so far provided only limited guidance on how to integrate predatory pricing screens, foreclosure analysis, and Amex’s platform-wide effects inquiry. Accordingly, this Comment proposes a three-step framework for evaluating loyalty discounts in two-sided transaction platforms. As a threshold matter for the framework, courts should determine whether the defendant possesses sufficient market power to make foreclosure plausible. Then, courts should identify the mechanism of exclusion. When price is the clearly predominant mechanism of exclusion, that is, when the challenged practice operates mainly through price, courts should apply the appropriate price-cost screen.11 Second, when the challenged practice instead functions as de facto exclusivity by foreclosing rivals from the scale or channels necessary to compete, courts should assess the arrangement under an exclusive-dealing framework.12 Third, once exclusionary effects have been identified, courts should assess competitive effects at the platform level under Amex to determine whether the conduct reduced competition “as a whole,” including by restricting total transactions or producing supracompetitive net pricing across the platform.13

Finally, placing Amex at the effects stage rather than treating it as a threshold gatekeeping rule allows this three-step framework to uphold the error-cost logic of predatory pricing doctrine while also accounting for non-price exclusionary mechanisms that may have amplified effects in two-sided transaction markets.

II. Loyalty Discounts and the Price-Cost Test

Sellers offer loyalty discounts in many forms, including market share discounts, rebates, and other conditional payments that reward buyers for concentrating their purchases with those sellers. Courts reviewing loyalty discounts have considered whether the challenged conduct should be assessed as low-price competition under the predatory pricing framework or as de facto exclusive dealing under foreclosure analysis.14 Indeed, existing caselaw supports both a cost-based approach that protects aggressive discounting in the absence of below-cost pricing and a foreclosure-based approach that focuses on whether the arrangement denies rivals meaningful access to scale or distribution.15

A. Loyalty Discounts as Price Competition

One line of cases treats loyalty discounts as a form of legitimate price competition that should not trigger antitrust liability unless the defendant’s prices are below cost. In Barry Wright Corp. v. ITT Grinnell Corp., the First Circuit held that prices above both incremental and average costs could not be treated as exclusionary under § 2 of the Sherman Act because aggressive price cutting ordinarily benefits customers and demonstrates a “legitimate” business practice.16 That is, a firm cannot rationally maintain prices below cost unless it expects later to recoup its losses, while an “equally efficient competitor[]” can generally match prices above cost without incurring losses.17

In Brooke Group, the Supreme Court affirmed Grinnell’s rationale by finding false positives “especially costly” because price cutting is “the very essence of competition.”18 With the goal of decreasing the risk of chilling legitimate competition in mind, the Court established a two-part price-cost test in which predatory pricing liability requires proof that (1) the defendant’s prices were below an appropriate measure of cost and (2) the defendant had a dangerous probability of recouping its investment in below-cost prices.19 Prices above cost, on the other hand, are presumptively lawful for predatory pricing claims in the absence of additional exclusionary conduct.20

Subsequent cases have adapted this general cost-based logic to certain loyalty discounting practices. In Virgin Atlantic Airways Ltd. v. British Airways PLC, for example, the Second Circuit viewed loyalty rebates paid to travel agents as “reward[ing] customer loyalty” and therefore “promot[ing] competition on the merits.”21 To sustain the plaintiff’s attempted-monopolization claim, the court required price-cost test proof of (1) below-cost pricing and (2) recoupment.22 Virgin Atlantic under a narrow reading thus reflects the perspective that volume discounts and loyalty rebates are generally procompetitive unless they result in predatory pricing.23

The Ninth Circuit adopted a more specific cost-based approach in PeaceHealth, a bundled-discount case that involved allegations that PeaceHealth, a dominant hospital system, unlawfully bundled discounts on “tertiary” care by making itself the sole preferred provider for all services and, consequently, excluding a rival that did not offer tertiary service.24 There, the court applied a “discount attribution” test to identify bundled discounts capable of excluding a hypothetical equally efficient rival and held that bundled discounts are not exclusionary unless, after attributing the full discount on the bundle to the competitive product, the resulting price of that product falls below the defendant’s incremental cost.25 PeaceHealth therefore adapted and extended Brooke Group’s below-cost test into the bundled-discount setting, at least, where the alleged harm flowed from the defendant’s pricing of the competitive product.26

In addition, PeaceHealth justified the discount attribution test on “administrability” and error-cost grounds.27 The court held that “[l]ow prices benefit consumers regardless of how those prices are set” and sought a rule that would protect discounting unless it had the potential to exclude an equally efficient rival through below-cost pricing.28 Thus, PeaceHealth established an important cost-based approach in the bundled-discount context.29

Grinnell, Brooke Group, Virgin Atlantic, and PeaceHealth support a cost-based approach when the alleged exclusionary mechanism is low pricing itself.30 The cases also affirm the principle that antitrust law generally should not intervene simply because a rival loses sales to a cheaper or more attractive offer, which gives customers “the benefits of . . . lower costs.”31

B. The Limits of Price-Cost Tests for Loyalty Discounts

Although courts have used price-cost screens as administrable safeguards against false positives, economists have questioned whether the price-cost screens always capture loyalty discounts’ competitive effects. Sean Durkin,32 for example, argues that the discount attribution test is highly sensitive to the classification of sales as “contested” (competitive product sales) or “non-contested,” which may be difficult to assign.33 Relatively small estimation errors in calculating the discount allocation on “non-contested” units to the price of “contested” units may distort the resulting attributed price and therefore overstate (exaggerate profit sacrifice) or understate (mask exclusionary effects) whether the discount appears exclusionary.34 Durkin therefore identifies an administrability concern where discount attribution may be conceptually useful but difficult to consistently apply in practice.35

Roger Blair36 and Thomas Knight37 also critique price-cost screens by arguing that bundled and loyalty discounts can exclude rivals without requiring the defendant to price below cost or sacrifice overall profitability in the first place.38 A discounting seller’s total sales may remain profitable in total, perhaps even “profitable at all times,” while steering enough purchases to deny rivals the scale necessary to effectively compete.39 Blair and Knight therefore suggest that when the harm comes from profitable foreclosure rather than short-run price sacrifice, a pure predatory pricing framework may under-detect exclusion.40

Finally, Jonathan Jacobson41 similarly argues that loyalty discounts that function as de facto exclusive dealing should be evaluated under a consumer-harm-based foreclosure framework rather than only through a profit-sacrifice or below-cost inquiry.42 The relevant question, he argues, is whether the arrangement “permits the defendant to raise (or maintain) prices above or restrict output below the competitive level” by denying rivals access to their required scale (not whether the defendant sacrificed profits).43

Although the critiques against price-cost tests do not claim that they are inappropriate for loyalty discounting cases in general, they do suggest that such tests may be underinclusive when, instead of offering low prices, the challenged arrangement locks up demand, increases switching costs, or denies rivals access to minimum efficient scale.44

C. When Loyalty Discounts Become De Facto Exclusivity

The cost-based line of cases therefore does not completely resolve the treatment of loyalty discounts. Foreclosure analysis may actually serve as the more appropriate review lens when the challenged arrangement operates less through price and more through contractual commitment or switching penalties.

The clearest source for distinguishing between cost-based and foreclosure-based arrangements is ZF Meritor.45 In the case, the Third Circuit rejected Eaton’s argument that its long-term rebate agreements were lawful simply because Eaton’s prices were above cost.46 The court held that although a price-cost test may be appropriate when price is the “clearly predominant mechanism of exclusion,” it did not control here because Eaton’s agreements functioned as de facto exclusive dealing, in which it conditioned not only rebates but also continued supply and other commercial benefits on customers purchasing about 90 percent of their requirements from Eaton.47 Therefore, the court held that it would apply a rule-of-reason foreclosure analysis instead of treating above-cost pricing as dispositive.48

ZF Meritor supports a mechanism-sensitive approach by holding that a pure price-cost screen may miss the relevant competitive harm when the exclusion primarily functions through contractual structures, market-share penetration targets, termination rights, or switching penalties, as opposed to low prices.49 Specifically, a pure price-cost screen may miss the harm—particularly where rebates are retroactive or structured on an all-units basis—because such rebates disincentivize switching by threatening the loss of the discount across the buyers’ entire purchase volume. A rebate program may also keep a seller’s overall price above cost while diverting a small share of disproportionately expensive purchases; if the buyer loses the rebate not only on the diverted units but also on prior or remaining purchases, a rival may need to compensate the buyer for the lost discount across a much larger volume of sales.50 As a result, the loyalty discount can function as a switching penalty or “lock[-]up” mechanism rather than a simple low price.51

Overall, the present competitive concern is not only whether the defendant sacrificed profits in the short run, as price-cost screens investigate, but also whether the rebate structure foreclosed the contestable portion of demand by making it economically irrational for customers to shift business to rivals, even when the defendant remained profitable “at all times.”52

III. Exclusive Dealing and Foreclosure

Exclusive dealing arrangements induce a buyer to purchase all or a substantial portion of its product or service requirements from one seller for some period of time.53 The arrangements may take the form of exclusivity clauses that prevent a buyer from purchasing from competitors, requirements contracts that commit the buyer to purchasing most or all of its total requirements of specific goods only from the seller, or arrangements that stop short of formal exclusivity but still make it economically infeasible for customers to buy from rivals.54 Exclusive dealing arrangements can be procompetitive if they secure supply, improve distribution, reduce free riding, and encourage investment.55 However, the arrangements can also harm competition by denying rivals access to the channels, customers, or scale necessary to effectively compete.56

Because exclusive dealing can produce both beneficial and harmful competitive effects, courts generally review the doctrine under the rule of reason. The traditional rule-of-reason foreclosure inquiry asks whether the arrangement forecloses a “substantial share of the relevant market” or “significantly limit[s]” entry opportunities, but subsequent cases and commentary have noted that foreclosure percentages alone do not sufficiently capture the whole analysis.57 The exclusive dealing inquiry, therefore, should address whether the challenged arrangement significantly limits rivals’ ability to enter into or remain in the market and thus harms the competitive process rather than merely disadvantaging particular competitors.58

A. Exclusive Dealing and Foreclosure Inquiry

In Tampa Electric, the Supreme Court held that even if a contract qualifies as an exclusive-dealing arrangement, it violates § 3 of the Clayton Act only if it is probable that the “competition foreclosed by the contract . . . constitute[s] a substantial share of the relevant market.”59 The Court instructed lower courts to weigh the contract’s probable effect of creating “such a potential clog on competition” by taking into account the proportion of commerce foreclosed, the strength of the parties, and the immediate and future effects on effective competition.60

Tampa Electric is a foundation foreclosure case in which the “substantial share” requirement may function as a screen for determining whether rivals’ opportunities to compete have been significantly limited rather than a purely numbers-based threshold that does not take into account market realities.61

B. Loyalty Discounts as De Facto Exclusive Dealing

When loyalty discounts function by steering or locking up demand—for example, through rebates and penalties—rather than simply by lowering price, courts have sometimes treated those loyalty discounts as de facto exclusive dealing.62 In LePage’s, the Third Circuit held that 3M’s bundled rebate programs and related conduct could support a Sherman Act § 2 liability even though 3M, a dominant manufacturer, had not priced its transparent tape below cost.63 The court’s review centered around 3M’s use of “substantial rebates” to customers conditioned upon them purchasing and hitting target growth rates across several product lines.64 Customers that failed to meet targets lost the rebate across the entire product line.65 3M’s rebate structure incentivized customers to maximize their discounts by meeting 3M’s targets and concentrating their purchases with 3M, ultimately allowing 3M to deny LePage’s meaningful access to major customers and maintain its monopoly.66 Even though subsequent courts, especially PeaceHealth, have been reluctant to advance a broad non-cost-based approach to bundled discounts, LePage’s still supports the narrower proposition that above-cost rebate structures may, in certain circumstances, be unlawful when they function less like price competition and more like exclusionary dealing.67

The same logic of treating above-cost arrangements as unlawful when they function like exclusionary dealing appears in United States v. Dentsply International.68 Dentsply’s “Dealer Criterion 6” policy required its authorized dealers to offer Dentsply’s product as the “only or dominant choice” and kept competing sales “below the critical level necessary for any rival to pose a real threat” to Dentsply’s market share.69 Although competitors could theoretically still have sold directly to dental laboratories, the Third Circuit held that Dentsply’s dealer policy effectively kept rivals from the “narrow, but heavily traveled” distribution channel through which they needed to compete.70 The court further explained that “it is not necessary that all competition be removed from the market,” and the central question is whether the challenged conduct “bar[s] a substantial number of rivals or severely restrict[s] the market’s ambit.”71

ZF Meritor further extended Dentsply’s reasoning to long-term market share agreements.72 Eaton, a dominant heavy-truck transmission supplier, offered five-year agreements requiring each of the market’s four direct purchasers of HD transmissions to source approximately 90 percent of their requirements from Eaton in exchange for rebates and related benefits.73 Although the agreements were not formally 100 percent exclusive, the Third Circuit held that they operated as de facto exclusive dealing contracts because no direct purchaser was practically willing to risk jeopardizing its relationship with the dominant supplier.74 Although Eaton argued that its rebates were lawful because prices remained above cost, the court rejected the argument, holding that price-cost tests are not dispositive where “price itself [is] not the clearly predominant mechanism of exclusion.”75 Here, above-cost pricing therefore did not foreclose antitrust injury.76

McWane also illustrates that non-price switching costs can create substantial foreclosure even in short-term or nonbinding arrangements.77 The Eleventh Circuit upheld the Federal Trade Commission’s conclusion that McWane’s “Full Support Program,” which penalized switching through clawbacks or temporary supply cutoffs, deprived a new entrant of enough distribution to achieve efficient scale.78 The court rejected the argument that the short-term, nonbinding nature of the arrangements insulated them from antitrust scrutiny, reasoning instead that “market realities” made it economically infeasible for distributors to switch and McWane was able to “raise[]” its already supracompetitive prices after rival entry.79

 These cases support a foreclosure-based approach when loyalty discounts function as de facto exclusive dealing.80 De facto exclusive dealing is not only concerned about whether the defendant charged low prices, but also the arrangement’s denial of demand, distribution, or minimum scale necessary for rivals to become effective competitive constraints.81

IV. Two-Sided Transaction Platforms and Matched-Transaction Foreclosure

A. Two-Sided Transaction Markets after American Express

In Amex, the Supreme Court addressed how competitive effects should be assessed in two-sided transaction markets, or markets in which transactions require “simultaneous[]” participation on both sides of a platform.82 The Court held that credit-card networks sell “only one product—transactions”—that are jointly consumed by merchants and cardholders.83 The value of the product depends on participation on both sides: merchants value cards that many consumers carry and consumers value cards that many merchants accept.84 The Court further held that, because such platforms exhibit “pronounced indirect network effects,” competitive effects must be assessed in the “market as a whole” rather than by focusing only on one side.85 In the Court’s view, a one-sided inquiry risked condemning pricing arrangements that subsidize one side of the platform in order to increase participation and total transaction output.86

Herbert Hovenkamp87 similarly argues that Amex should be read as a foreclosure case in which American Express’s anti-steering rules reduced switching and consequently created “derived demand” for its cards, which both “supported increased merchant fees” and reduced rival networks’ ability to attract merchants and cardholders.88

Hovenkamp’s interpretation also reflects the application of Amex in subsequent cases outside the card payment market.89 In US Airways, Inc. v. Sabre Holdings Corporation, the Second Circuit held that competition on a two-sided transaction platform must be assessed based on net prices across both sides of the platform (travel agents and airlines using a global distribution system, or “GDS”), and contractual restraints and single-homing practices that foreclose rivals from achieving competitive scale can lead to anticompetitive effects by preventing rivals from gaining enough participation on either side of the platform.90 Likewise, courts assessing platform restraints have increasingly sharpened their inquiry over whether the conduct restricts rivals’ ability to compete for transactions, rather than on price levels alone.91 Therefore, courts may find liability where an exclusionary restraint prevents rivals from competing for the matched transactions necessary to achieve enough scale.92

B. Transaction Platforms vs. Non-Transaction Platforms

Two-sided transaction platforms differ functionally from other two-sided platforms that serve two user groups without facilitating a simultaneous exchange between them.93 In a conventional two-sided platform, such as a media business connecting advertisers and viewers, the two groups may affect one another through indirect network effects without intermediating a single transaction jointly consumed by both.94 Advertisers may value viewer attention and exposure and viewers may react positively or negatively to advertising, but the platform generally provides distinct services to each side rather than brokering one simultaneous exchange.95

On the other hand, two-sided transaction platforms, including payment networks, booking systems, and routing platforms, facilitate exchanges that require both sides to participate at once.96 The platform’s product is the transaction itself.97 A payment card transaction requires both a merchant and a cardholder; a GDS for booking flights requires both an airline and a travel agent; and an e-prescribing routing platform requires both a prescriber and a pharmacy.98 In each instance, output consists of transactions that cannot occur through the platform unless both groups participate simultaneously.99 Justice Breyer distinguished this feature in his dissent in Amex by describing a two-sided transaction platform as one that “(1) offer[s] different products or services (2) to different groups of customers, (3) whom the ‘platform’ connects, (4) in simultaneous transactions.”100 Although his definition appeared in dissent, the Second Circuit later relied on Justice Breyer’s interpretation in Sabre by holding that a GDS is a transaction platform because it offers different services to airlines and travel agents and connects them in simultaneous booking transactions.101

The distinction between transaction and non-transaction platforms matters because foreclosure can function differently in in two-sided transaction platforms, in which exclusion on one side may also reduce a rival’s ability to compete for the corresponding transactions on the other side. In ordinary one-sided or non-transaction two-sided contexts, exclusion may generally involve the denial of access to customers, outlets, or channels. In a transaction platform, however, foreclosure on one side may also reduce the rival’s ability to compete for the corresponding transactions on the other side because the rival cannot intermediate transactions without capturing demand from both groups together. This particular feature does not by itself establish liability, but it changes how the effects of foreclosure should be understood and assessed.102

C. The Chicken-and-Egg Problem and Entry Barriers

The simultaneity of two-sided transactions can also amplify entry barriers when “loss of participation” on one side automatically “risks losing participation” on the other side, creating a “feedback loop of declining demand” even when prices are competitive.103 Because a rival must attract enough users on both sides at once to compete effectively, entry can frequently involve a “chicken-and-egg” problem: users on one side will not join until and unless enough users are already present on the other side, while users on the other side will wait for the first group to join.104 Jean-Charles Rochet105 and Jean Tirole106 describe this as a basic feature of platform competition, and David Evans107 and Richard Schmalensee108 similarly describe the main challenge of platform entry as attaining sufficient critical mass on each side to produce self-sustaining indirect network effects.109

Courts and agencies have recognized the relevance of this “chicken-and-egg” problem.110 In Surescripts, the district court accepted allegations that rivals in e-prescribing services were facing a difficult entry barrier because customers, electronic health record (“EHR”) providers, would not multi-home unless enough users, pharmacies, were already present on the rival network, and pharmacies refused to connect unless enough EHR providers were already using the network.111 Surescripts’ loyalty arrangements allegedly raised the cost of multi-homing and “significantly elevat[ed] the critical mass [of initial customers]” a rival would need to become a viable network.112 The Commission further alleged that the effectively exclusive contracts foreclosed at least 70 percent of each market and suppressed competitive efforts by firms that allegedly “offered lower prices and greater innovation.”113 Likewise, in In re Surescripts, the court held that achieving critical mass was a crucial barrier to entry in two-sided transaction markets in which the loyalty scheme itself could become a self-reinforcing barrier once dominance is achieved.114

Thus, exclusion on one side of a transaction platform may do more than deny rivals a set of customers; it may also deny them the matched transactions necessary to overcome the platform’s structural entry barriers.115

D. Matched-Transaction Foreclosure

Traditional exclusive dealing analysis asks whether “the competition foreclosed” by a contract “constitute[s] a substantial share of the relevant market.”116 In two-sided transaction platforms, however, foreclosure may operate through a somewhat different mechanism: limiting participation on one side may also reduce the pool of matched transactions available to rivals on the other side. Because output on such platforms depends on joint, simultaneous participation, a restraint that impairs access to one side may have platform-wide effects beyond the immediate loss of that user group.

When a dominant two-sided platform compels participants to single-home, or route transactions exclusively through its network, rivals may lose access not only to those users but also to the corresponding matched transactions that those users would have created with participants on the other side.117 The result may be an amplified foreclosure effect even where the formal percentage foreclosed on one side otherwise looks modest.118

The allegations in In re Surescripts illustrate this potential amplified foreclosure effect.119 The court described the e-prescribing platform’s value as “its ability to connect doctors with pharmacies,” noting both sides’ incentive to maximize connections by “establish[ing] as many doctor-to-pharmacy e-prescribing connections as possible,” and it concluded that the loyalty scheme plausibly prevented rivals from reaching the level of critical mass necessary to compete.120 The court further held that the clawback provision “greatly amplifie[d] the scheme’s exclusionary effect,” despite prices (incentive payments to doctors) on one side being subsidized by fees charged to pharmacies.121 The alleged harm, essentially, did not depend on below-cost pricing but rather on a loyalty structure that made defection costly enough to deny rivals the transaction volume necessary to become viable.122

Similarly, in United States v. Visa, the district court held at the pleading stage that the price-cost test was “not dispositive,” as the government did not allege that “price itself” was the exclusionary tool.123 Instead, the government advanced a routing and contracting scheme with cliff pricing, clawbacks, volume targets, and penalties that plausibly foreclosed a substantial share124 of debit transactions and, reinforced by indirect network effects, trapped rival networks in a “vicious cycle” of insufficient usage and inadequate scale.125 Like the court did in In re Surescripts, the court here noted that “the two-sidedness of the [debit routing market] amplifie[d] [the contracts’] alleged exclusionary effect,” or degree of foreclosure.126 Thus, it treated the challenged conduct as a foreclosure problem rather than as a conventional predatory pricing claim.127

Indeed, a pure price-cost inquiry can be underinclusive in two-sided transaction platform cases. If the challenged restraint works by limiting routing, discouraging multi-homing, or locking up the transaction volume needed for rival scale, the core competitive problem is denial of scale and exchange opportunities, not just whether the platform priced one side below cost. Foreclosure may occur even where prices are above cost and the price on one side of the platform is subsidized.128 ZF Meritor provides a key doctrinal bridge: where price is not the “clearly predominant mechanism of exclusion,” above-cost pricing does not necessarily make the conduct lawful.129 In two-sided transaction platforms, courts should ask whether the arrangement denied rivals access to the transaction volume necessary to compete effectively in addition to asking, but placing less weight on, whether the defendant’s prices on a given side were above cost.

E. Net Pricing and False Positives in Two-Sided Transaction Markets

Crucially, the meaning of price is complicated by two-sided transaction platforms. Because the platform sells a single transaction jointly consumed by both sides, pricing can involve charging one side while subsidizing the other to increase user participation and total output.130 Amex warns that focusing only on the “ability to charge above a competitive price” on one side may produce false positives that “chill the very conduct the antitrust laws are designed to protect” because a fee increase on that side may lead to greater benefits, participation, or output on the other side.131 In support of its warning, the Court held that American Express’s higher merchant fees alone did not establish anticompetitive effects in the absence of evidence that the price of credit-card transactions “as a whole” was higher than in a competitive market, output was reduced, or competition was otherwise “stifled.”132 Including both sides of the platform to assess price therefore avoids condemning increased prices on one side of the platform as anticompetitive when the platform has engaged in procompetitive price rebalancing that ultimately increased overall transactions (output).

In single-sided market predatory pricing cases, price is the amount charged for a unit of the product, and Brooke Group asks through its price-cost test whether the defendant priced below an appropriate measure of cost and could recoup the losses.133 Two-sided transaction platforms may complicate this predatory pricing framework because the platform can charge a positive price on one side and then set a lower price, including a price of zero or negative value, to the other side as subsidies through rewards, discounts, or incentive payments. However, price is not economically separable by side in a two-sided transaction platform because charging merchants more may increase the platform’s ability to provide greater cardholder rewards, thus increasing cardholder usage and in turn increasing merchant sales, ultimately resulting in total transactions.134

In Sabre, the court operationalized Amex’s logic of measuring price “as a whole.”135 The Second Circuit explained that, taking “both sides” of the platform “into account,” prices are supracompetitive only to the extent that the “net prices charged” across both sides “combined exceed[] the prices that would have been charged in a competitive market.”136 The net price can be understood as the platform’s transaction-level price across both sides, with subsidies or rewards on one side offsetting charges on the other.137 Under this relationship, if a platform can raise the price on one side (for example, increasing merchant fees) while lowering the price on the other side (increasing cardholder rewards), the net price may be ambiguous and depend on relative per-transaction prices. In Sabre, the court found incomplete a damages model that looked only at the fee paid by the airline, without accounting for what the platform charged or subsidized on the travel-agent side.138

If courts were to adapt predatory pricing doctrine to two-sided transaction platforms, they should do so cautiously. One possible implication is that a Brooke-Group-style inquiry would make the most sense only if the platform’s transaction-level pricing, considered across both sides, plausibly reflects genuine below-cost pricing rather than ordinary price rebalancing—for example, a platform that has subsidized one side so aggressively that it generates a very negative price on that side, resulting in a transaction as a whole that can plausibly only be priced below cost.139

A price-cost test still makes sense when plaintiffs allege that exclusion occurred because the platform set prices so low that an equally efficient rival could not match them.140 But in cases where the challenged conduct instead works through exclusivity, routing restrictions, or loyalty penalties that deny rivals access to scale, a one-sided price-cost safe harbor may miss the actual competitive harm.141

V. Proposed Three-Step Approach

Courts have not yet articulated a clear method for integrating price-cost tests, foreclosure analysis, and Amex’s platform-wide effects framework. Price-cost tests protect aggressive price competition, but they may under-detect non-price foreclosure. Exclusive dealing doctrine captures denial of scale, but it can miss the cross-side implications of foreclosure in two-sided transaction markets. Amex requires effects to be assessed in the market “as a whole” but also says little about how courts should identify exclusionary mechanisms before that effects inquiry begins.142 This Comment therefore proposes a three-step framework that combines the principles in Brooke Group, PeaceHealth, ZF Meritor, and Amex. The first two steps identify the mechanism of exclusion, and the third step assesses competitive effects as a whole at the platform level.

A. Market Power Threshold

As a threshold matter, foreclosure analysis should start with market power. Exclusive or de facto exclusive arrangements are not significantly harmful to competition unless the defendant can use them to deny rivals access to scale, raise rivals’ costs, or maintain supracompetitive pricing. The Supreme Court has defined market power as “the ability to raise prices above those that would be charged in a competitive market,” and monopoly power as the power to control price or exclude competition.143 Market share can support an inference of market power but does not automatically establish it when courts also consider barriers to entry, available substitutes, and evidence of actual competitive constraints.144 In Tampa Electric, an exclusive dealing agreement required “substantial foreclosure” of the relevant market because the defendant’s market power made the foreclosure meaningful enough to prevent rivals from offsetting lost volume.145 Courts have also held that exclusive dealing may be lawful when implemented by a firm without market power but unlawful when implemented by a dominant firm or monopolist.146

The threshold inquiry is especially important in two-sided transaction markets because a platform that lacks market power is less likely to be able to impose loyalty structures that meaningfully deter multi-homing, sustain exclusion, or deny rivals the transaction volume necessary to reach minimum viable scale. If a platform does have market power, however, even partial foreclosure can matter more than in an ordinary one-sided market because rivals must attract both sides simultaneously to compete. For example, in United States v. Microsoft Corp., the D.C. Circuit recognized that “a monopolist’s use of exclusive contracts . . . may give rise to a [Sherman Act] § 2 violation even though the contracts foreclose less than the roughly 40% or 50% share usually required in order to establish a [Sherman Act] § 1 violation” because the monopolist’s position can make those restraints particularly potent.147

This market power threshold therefore serves two purposes: it screens out false positives where the defendant lacks the ability to impose meaningful exclusion and it clarifies when the structural features of a two-sided transaction platform establish foreclosure as plausibly competitively harmful.148

B. Step One: Is Price the Predominant Mechanism of Exclusion?

Once market power is established, courts should first ask whether “price itself” is the “clearly predominant mechanism of exclusion.”149 If the alleged harm consists of low prices or conditional discounts that disadvantage rivals through price competition alone, a cost-based screen should apply.

Brooke Group held that a plaintiff challenging low prices must prove that the defendant priced below an appropriate measure of cost and had a dangerous probability of recouping its losses.150 The Court justified the requirement by explaining that “[l]ow prices benefit consumers regardless of how those prices are set” and that mistakenly condemning aggressive price competition would “chill the very conduct the antitrust laws are designed to protect.”151 PeaceHealth adapted Brooke Group’s logic to the bundled discount context by using the discount attribution test, which presumes that loyalty discounts are lawful unless the resulting price, after the entire discount is attributed to the competitive product, falls below the defendant’s incremental cost.152 PeaceHealth thus supports a cost-based screen for bundled discount cases in which pricing is the operative exclusionary mechanism.

In two-sided transaction platform cases, the same cost-based principle can serve as a useful gatekeeper: if a plaintiff alleges that a loyalty discount arrangement excluded rivals because the platform offered such low, attractive pricing that an equally efficient rival could not match it, courts should ask whether the challenged transaction-level pricing reflects genuine profit sacrifice or simply aggressive competition.153 When price is the “clearly predominant mechanism,” the rationale of Brooke Group and PeaceHealth remains strongest.154

C. Step Two: Foreclosure and Denial of Scale

If price is not the clearly predominant mechanism, courts should then move to foreclosure analysis. ZF Meritor matters most at this step. The Third Circuit held that the price-cost test is still relevant when price is the “clearly predominant mechanism of exclusion,” but that above-cost prices do not automatically make conduct that functions as de facto exclusive dealing lawful.155 The court instead applied rule-of-reason foreclosure analysis because Eaton’s agreements foreclosed rivals from achieving competitive scale through their long duration and de facto purchase requirements.156

The same foreclosure analysis applied in Dentsply and McWane. In Dentsply, the Third Circuit held that the dealer policy kept rivals “below the critical level necessary” to pose a real competitive threat by denying them meaningful access to the principal distribution channel.157 In McWane, the Eleventh Circuit found liability where exclusivity prevented a rival from obtaining the distribution necessary to reach efficient scale despite the below-cost pricing being absent.158 The cases thus show that the core foreclosure question is whether the practice significantly limited rivals’ ability to compete, not only whether the defendant charged low prices.

In two-sided transaction platforms, the inquiry should expressly account for matched-transaction foreclosure. The court should ask not only how much of one side was foreclosed, but also whether the restraint prevented rivals from capturing the transaction volume necessary to attract the other side and achieve viable scale. Essentially, the main foreclosure question is not how many users were denied to rivals on one side, but whether the restraint removed enough matched transactions from competition to keep rivals from overcoming the platform’s chicken-and-egg barriers and becoming effective competitive constraints.159 Relevant factors that courts so far have considered include the percentage of transaction volume foreclosed, whether the restraint induces single-homing, the duration and terminability of the arrangement, the presence of cliff pricing or clawbacks, and whether the platform’s structure makes multi-homing or entry particularly difficult.160 For example, in Surescripts, the court held that penalty-backed loyalty programs foreclosed 70 to 80 percent of transactions, which in turn prevented rivals from reaching the scale necessary to compete even though prices were not symmetrical across sides.161 Similarly, in Visa, the court focused on cliff pricing and cross-side penalties that allegedly foreclosed nearly half of all debit transactions.162

Jacobson importantly argues that exclusive dealing is competitively harmful when it “permits the defendant to raise (or maintain) prices above or restrict output below the competitive level” by denying rivals meaningful opportunities to compete.163 His argument suggests that the foreclosure inquiry should remain tied to consumer welfare and the competitive process rather than whether particular rivals are disadvantaged.164

D. Step Three: Platform-Wide Competitive Effects under Amex

Once the mechanism of exclusion has been identified and foreclosure has been plausibly established, courts should then assess competitive effects at the platform level under Amex.165 This final step asks whether the challenged conduct harmed competition in the market “as a whole,” for example, by reducing total transactions, increasing net prices across both sides, lowering quality, reducing innovation, or otherwise impairing platform competition.166 Amex should therefore operate as an effects inquiry, not as the sole gatekeeping tool for all platform claims.167

Indeed, placing Amex at the competitive-effects stage prevents courts from mistaking price rebalancing for harm.168 A restraint may raise the price on one side while lowering the price on the other, and that shift can be procompetitive if it increases total platform participation and output. However, once foreclosure is shown, Amex requires courts to ask whether the restraint reduced competition at the transaction level.169

If matched-transaction foreclosure reduces participation on one side, and that reduction in turn limits participation on the other side, platform-wide output may fall. Conversely, if the challenged loyalty arrangement increases total transactions (output) and benefits users on both sides despite harming a particular rival, a finding of anticompetitive harm would be less likely.170 In Sabre, the court placed stress on joint participation by assessing competitive effects and damages through prices on both sides of the platform.171 The court noted that supracompetitive pricing exists where “the net prices charged . . . combined exceed[] the prices that would have been charged in a competitive market.”172 In Surescripts, the court also accepted that Surescripts’ loyalty programs foreclosed rivals from achieving scale by, in addition to suppressing entry and innovation, increasing net prices across both sides of its e-prescribing platform.173

This final step addresses Amex’s concern with false positives while still allowing courts to recognize non-price foreclosure mechanisms.174

E. Why Amex Belongs at the Effects Stage

One remaining question is whether Amex should primarily be framed as a market-definition case or an effects-analysis case. For the purposes of this Comment’s proposed three-step framework, applying Amex at the competitive-effects stage is more functionally appropriate.

It is true that Amex contains strong language about market definition and including both sides of a transaction platform in the relevant market.175 The court in Sabre, for example, adopted Amex’s logic for GDS platforms.176 But treating Amex mainly as a threshold market-definition rule risks conflating two different questions: how the platform is structured, and whether the challenged conduct actually harmed competition. For example, if a court requires plaintiffs to define a single two-sided market including both doctors and pharmacies as well as to show harm across both sides of that market, the court risks shifting attention from the alleged foreclosure to the platform’s overall structure, before the exclusionary mechanism can be properly assessed. Indeed, Hovenkamp argues that courts do not need to redefine relevant markets to include complements in every case simply to account for cross-side effects.177 Courts can instead assess those effects directly when evaluating competitive harm.178

Amex should also be treated primarily as an effects analysis decision because reading it mainly as a market definition rule may raise plaintiffs’ burden by requiring proof of cross-side harm (not just higher prices on one side or foreclosure of one user group) before courts have identified the underlying mechanism of exclusion.179

Courts, however, may already be cautious about using Amex for market definition beyond where it factually applies. The Amex majority distinguished payment platforms from other multi-sided businesses when it held that credit-card networks sell a single product—transactions—that is jointly consumed by merchants and cardholders, without suggesting that all platforms involving two user groups require a unified market definition.180 The Court also did not revise the traditional foreclosure framework under §§ 1 and 2 of the Sherman Act. Justice Breyer’s dissent specifically focused on platforms that facilitate “simultaneous transactions,” which suggests that other platform structures may raise different analytical issues.181 In Sabre, for example, the court used Amex’s two-sided transaction market definition because pricing and output were inseparable across the two sides, assessed exclusionary conduct, switching costs, and foreclosure effects, and identified net supercompetitive pricing (not just pricing on one side), thus reaffirming Amex’s instruction that competitive effects should be assessed under cross-side feedback.182

Finally, the proposed three-step approach places Amex at the final stage after courts have assessed whether exclusion occurred through price or non-price mechanisms because using Amex early at the market-definition stage (for example, at the threshold stage of the three-step approach) may also risk conflating how harm occurs with whether harm occurred. Market power has traditionally functioned as a market power screen and not as a tool for identifying exclusionary conduct.183 On the other hand, foreclosure analysis asks whether rivals are denied access to customers, scale, or the distribution necessary to compete, which does not require determining whether one or two markets exist.184 In two-sided transaction platforms, foreclosure may present itself through mechanisms best assessed through traditional foreclosure analysis, including routing restrictions, single-homing requirements, or penalties in loyalty programs that remove transactions from the contestable set. Amex’s platform-wide approach, therefore, should be applied only after foreclosure is plausibly established to ensure that courts do not treat price rebalancing or output redistribution between sides as anticompetitive harm. In Sabre, although the Second Circuit noted that GDSs function as two-sided transaction platforms and thus required netting prices across both sides to assess competitive effects, it did not expressly require plaintiffs to first show that the market was integrated and two-sided in order to challenge the exclusionary contractual restraints that impeded rivals’ access to scale.185 Similarly, in In re Surescripts, the court assessed loyalty and exclusivity provisions through a foreclosure analysis before it considered the argument that cross-side network effects amplified exclusionary effects.186

Therefore, placing Amex at the final stage allows the roles of each step to remain distinct. Market power remains the threshold screen. Step One asks whether the case is about low-price competition. Step Two asks whether the conduct instead works by foreclosure. Step Three then asks whether, taking both sides of the platform into account, the challenged conduct harmed competition in the market as a whole.

F. Administrability and Error-Cost Justifications

The proposed ordering has administrability advantages. A cost-based screen in Step One protects aggressive price competition and reduces the risk of condemning lawful discounting.187 A structured foreclosure-based inquiry in Step Two incorporates factors such as market power, foreclosed shares, switching costs, duration, and denial of scale.188 Step Three then adopts Amex’s warning against false positives by requiring proof of harm to platform-wide competition instead of harm to one side alone.189

The ordering also helps avoid making Amex do too much doctrinal work, as it allows courts to think about the distinctive structure of two-sided transaction platforms without turning every platform case into a threshold market-definition dispute that makes the actual exclusionary mechanism more obscure. The three-step framework prevents a broad or overextended interpretation of Amex by allowing courts to identify exclusion where it occurs while accounting for cross-side amplification where it is relevant, and requiring evidence that the challenged conduct harmed competition “as a whole.”190

VI. Conclusion

Loyalty discounts can wear very different hats. They may be employed as ordinary price competition, conditional pricing that screens out less efficient rivals, or de facto exclusivity that denies rivals access to the scale necessary to compete. Two-sided transaction platforms amplify the ambiguity of loyalty discounts because transactions require simultaneous participation on both sides. Consequently, exclusion on one side may also remove the rival’s access to the matched transactions necessary for attracting the other side, which may entrench a platform’s dominance without the need for below-cost pricing.

Price-cost tests remain important because they protect aggressive pricing competition and screen out weak predatory pricing claims. However, they may under-detect exclusion when the challenged practice works mainly through foreclosure rather than price sacrifice. Exclusive dealing doctrine is able to identify foreclosure, but it must be applied with attention to the way foreclosure can operate in two-sided transaction platforms, especially where exclusion on one side may also deprive rivals of the transaction volume necessary to compete on the other. Amex, therefore, adds the necessary final insight: competitive harm in these markets must be assessed at the platform level, and not inferred from one-sided price changes alone.

The three-step framework proposed in this Comment offers a way to combine price-cost tests, foreclosure, and platform-wide effects. Courts should first screen for market power. They should then identify whether the alleged exclusionary mechanism is price or foreclosure. Finally, once that mechanism is identified, courts should assess whether the challenged conduct harmed competition in the platform as a whole. Overall, this framework keeps the screening function of cost-based rules, recognizes the importance of foreclosure and denial of scale, and avoids both false positives from price rebalancing and false negatives from profitable exclusion.

• See Virgin Atl. Airways Ltd. v. British Airways PLC, 257 F.3d 256, 265 (2d Cir. 2001) (describing loyalty rebates as rewarding customer loyalty and promoting competition on the merits); Roger D. Blair & Thomas F. Knight, Bundled Discounts, Loyalty Discounts, and Antitrust Policy, 16 Rutgers Bus. L. Rev. 123, 124-25 (2020) (describing loyalty discounts and their potential exclusionary effects).
• 509 U.S. 209, 222-24, 226 (1993); 515 F.3d 883, 905-07 (9th Cir. 2008).
• 509 U.S. at 222-24, 226; 515 F.3d at 901, 905-07.
• See Barry Wright Corp. v. ITT Grinnell Corp., 724 F.2d 227, 230, 232, 235-36 (1st Cir. 1983).
• 324 F.3d 141, 155, 158-60 (3d Cir. 2003); 696 F.3d 254, 278-79, 283 (3d Cir. 2012); 783 F.3d 814, 834-35, 838-41 (11th Cir. 2015).
• 585 U.S. 529, 535 (2018).
• See id. at 545.
• See id. at 544-49; Plaintiff FTC’s Mem. in Supp. of Mot. for Partial Summ. J. at 7, FTC v. Surescripts, LLC, No. 1:19-cv-01080 (D.D.C. 2020).
• See Jean-Charles Rochet & Jean Tirole, Platform Competition in Two-Sided Markets, 1 J. Eur. Econ. Ass’n 990, 990-91 (2003); Plaintiff FTC’s Mem. in Supp. of Mot. for Partial Summ. J., supra note 9, at 7.
• See, e.g., Plaintiff FTC’s Mem. in Supp. of Mot. for Partial Summ. J., supra note 8, at 7; In re Surescripts Antitrust Litig., 608 F. Supp. 3d 629, 646 (N.D. Ill. 2022) (stating that Surescripts’ clawback provision “greatly amplifie[d] the scheme’s exclusionary effect”).
• SeeBrooke Group, 509 U.S. at 222-24; ZF Meritor, 696 F.3d at 277-79, 283.
• See ZF Meritor, 696 F.3d at 277-79.
• Amex, 585 U.S. at 530, 547.
• See Brooke Group, 509 U.S. at 226-27; LePage’s, 324 F.3d at 158-59.
• SeeLePage’s, 324 F.3d at 158-59 (stating that discounts were functionally “designed to induce [customers] to award business to 3M to the exclusion of LePage’s”).
• Grinnell, 724 F.2d at 232, 235-36.
• Id. at 232.
• 509 U.S. at 222-24, 226-27; 724 F.2d at 235-36.
• Brooke Group, 509 U.S. at 222-24.
• See id. at 223-24.
• Virgin Atl. Airways Ltd. v. British Airways PLC, 257 F.3d 256, 265-66, 268-69, 271-72 (2d Cir. 2001).
• Id. at 266-69, 271-72.
• Id. at 265; see Brooke Group, 509 U.S. at 223-25; Grinnell, 724 F.2d at 232.
• 515 F.3d at 891-92, 903-05.
• Id. at 905-07, 909-10.
• Id. at 905-07; 509 U.S. at 222-24.
• 515 F.3d at 901, 906-07.
• Id. at 901.
• Id. at 905.
• See 724 F.2d at 235-36; 509 U.S. at 226-27; 257 F.3d at 265; 515 F.3d at 905-06, 909.
• See Brooke Group, 509 U.S. at 224 (quoting Brown Shoe Co. v. United States, 370 U.S. 294, 320 (1962)); PeaceHealth, 515 F.3d at 895, 905-07 (declining to adopt a rule “that might encourage more antitrust litigation than is reasonably necessary to ferret out anticompetitive practices”).
• Dr. Sean Durkin is an economist at Charles River Associates.
• Sean Durkin, The Competitive Effects of Loyalty Discounts in a Model of Competition Implied by the Discount Attribution Test, 81 ANTITRUST L.J. 475, 476, 501 (2017).
• Id. at 476-77.
• See id. at 475-77, 501.
• Roger Blair is a Professor of Economics at the University of Florida.
• Thomas Knight is the Economics Department Chair and a Senior Lecturer at the University of Florida.
• Blair & Knight, supra note 1, at 130.
• Id.
• See id.
• Jonathan M. Jacobson is a Partner Emeritus with the Antitrust and Competition Practice at Wilson Sonsini Goodrich & Rosati.
• Jonathan M. Jacobson, Exclusive Dealing, “Foreclosure,” and Consumer Harm, 70 Antitrust L.J. 311, 338 (2002).
• Id.
• See Durkin, supra note 33, at 476-77; Blair & Knight, supra note 1, at 130; Jacobson, supra note 42, at 338.
• 696 F.3d at 277.
• Id.
• Id. at 277-79, 283.
• Id. at 277-78.
• Id. at 278-83.
• See id. at 283, 287 (noting “a jury could have concluded that . . . the market penetration targets were as effective as express purchase requirements ‘because no risk averse business would jeopardize its relationship with the largest manufacturer of transmission in the market’”).
• Id. at 277-79, 283.
• See id.; Blair & Knight, supra note 1, at 130.
• See Omega Envtl., Inc. v. Gilbarco, Inc., 127 F.3d 1157, 1162 (9th Cir. 1997) (stating “the main antitrust objection to exclusive dealing is its tendency to ‘foreclose’ existing competitors or new entrants from competition in the covered portion of the relevant market during the term of the agreement”).
• See Geneva Pharms. Tech. Corp. v. Barr Labs., 386 F.3d 485, 509 (2d Cir. 2004); Omega Environmental, Inc. v. Gilbarco, Inc., 127 F.3d 1157, 1162 (9th Cir. 1997); Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039, 1062-63 (8th Cir. 2000).
• See Jacobson, supra note 42, at 311-12.
• See id.
• Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320, 328-29 (1961); see Jacobson, supra note 42, at 313.
• See Tampa Elec., 365 U.S. at 328-29.
• Id.
• Id.
• See id.
• See FTC v. Surescripts, LLC, 424 F. Supp. 3d 92, 102-03 (D.D.C. 2020).
• 324 F.3d at 155.
• Id. at 154.
• Id.
• Id. at 154-55.
• See 515 F.3d at 901; 324 F.3d at 155.
• 399 F.3d 181, 185, 191, 195-96 (3d Cir. 2005).
• Id. at 185, 195-96.
• Id. at 185, 190-91, 195-96.
• Id. at 191.
• See 696 F.3d at 277; 399 F.3d at 191.
• ZF Meritor, 696 F.3d at 277.
• Id. at 266-67, 278-79.
• Id. at 278-79, 283.
• Id. at 266-67, 277.
• McWane, 783 F.3d at 814, 834-35.
• Id. at 821, 839.
• Id. at 814, 834-35.
• SeeDentsply, 399 F.3d at 191, 196; ZF Meritor, 696 F.3d at 277; McWane, 783 F.3d at 834-35, 838-41.
• See id.
• 585 U.S. at 535.
• Id. at 545.
• Id.
• Id. at 544-46.
• Id.
• Professor Herbert Hovenkamp is a James B. Dinan University Professor at Penn Law and the Wharton School, University of Pennsylvania.
• Herbert Hovenkamp, Platforms and the Rule of Reason: the American Express Case, 2019 Colum. Bus. L. Rev. 35, 61 (2019).
• See id. at 59-61; US Airways, Inc. v. Sabre Holdings Corp., 938 F.3d 43, 57-58, 61-63 (2d Cir. 2019).
• 938 F.3d at 59-63.
• See id. at 59; Surescripts, 424 F. Supp.3d at 102-04.
• See Sabre, 938 F.3d at 57-58, 61-63.
• See Rochet & Tirole, supra note 9, at 990-91.
• See David S. Evans & Richard Schmalensee, The Antitrust Analysis of Multi-Sided Platform Businesses (Coase-Sandor Institute for Law & Economics Working Paper No. 623, 2012), at 2.
• See id.
• Amex, 585 U.S. at 545.
• See id.
• See id.; Sabre, 938 F.3d at 49; Surescripts, 424 F. Supp.3d at 95.
• See Amex, 585 U.S. at 545.
• Id. at 566-67 (Breyer, J., dissenting).
• See Sabre, 938 F.3d at 49, 57-59.
• Seeid. at 57-58; Amex, 585 U.S. at 535, 547-48.
• See Sabre, 938 F.3d at 56-58.
• Rochet & Tirole, supra note 9, at 990.
• Professor Jean-Charles Rochet is a Professor of Economics at the Toulouse School of Economics.
• Jean Tirole is honorary chairman of the Foundation JJ Laffont-Toulouse School of Economics and of the Institute for Advanced Study in Toulouse, and scientific director of TSE-Partnership.
• Dr. David S. Evans is an economist and a managing director at Berkeley Research Group.
• Professor Richard Schmalensee is the Howard W. Johnson Professor of Management, emeritus at the MIT Sloan School of Management.
• Evans & Schmalensee, supra note 94, at 9.
• See, e.g., Plaintiff FTC’s Mem. in Supp. of Mot. for Partial Summ. J., supra note 8, at 7, FTC v. Surescripts, LLC, No. 1:19-cv-01080 (D.D.C. 2020).
• 424 F. Supp. at 103-04.
• Id. at 95.
• Id.
• 608 F. Supp. 3d 629, 644-46 (N.D. Ill. 2022)
• See Plaintiff FTC’s Mem. in Supp. of Mot. for Partial Summ. J., supra note 8, at 7; Surescripts, 424 F. Supp. 3d at 95-96, 101-02.
• Tampa Elec., 365 U.S. at 328-29.
• See In re Surescripts, 608 F. Supp. at 644-46; United States v. Visa, 788 F. Supp. 3d 585, 611-12 (S.D.N.Y. 2025); Sabre, 938 F.3d at 61-63.
• See In re Surescripts, 608 F. Supp. at 646 (holding that a clawback provision “greatly amplifie[d] the scheme’s exclusionary effect”).
• See id. at 644-46.
• Id. at 644.
• Id. at 644-46.
• See id. at 645.
• 788 F. Supp. 3d at 609.
• See id. at 611 (noting that “at least 45% of all debit transactions and over 55% of CNP debit transactions” were foreclosed).
• Id. at 601-02, 611-12, 614.
• Id. at 612; see In re Surescripts, 608 F. Supp. 3d at 646.
• See Visa, 788 F. Supp. 3d at 609.
• See In re Surescripts, 608 F. Supp. 3d at 644-46.
• 696 F.3d at 277-79, 283.
• 585 U.S. at 535; see Sabre, 938 F.3d at 50-51, 59.
• Amex, 585 U.S. at 531, 547-48.
• Id. at 530, 547.
• 509 U.S. at 222-24.
• See Amex, 585 U.S. at 530.
• See 938 F.3d at 59; 585 U.S. at 530.
• Sabre, 938 F.3d at 59.
• See id. at 60-63; Amex, 585 U.S. at 547-48.
• Sabre, 938 F.3d at 59-63.
• Cf. 509 U.S. at 222-24; Sabre, 938 F.3d at 59-63.
• See Grinnell, 724 F.2d at 230, 232, 235-36.
• See ZF Meritor, 696 F.3d at 277; Surescripts, 424 F. Supp. at 102-04; see Visa, 788 F. Supp. 3d at 609-12.
• Amex, 585 U.S. at 530.
• NCAA v. Board of Regents, 468 U.S. 85, 109 n.38 (1984); Grinnell, 384 U.S. at 570-71.
• See Reazin v. Blue Cross & Blue Shield of Kan., Inc., 899 F.2d 951, 966-67 (10th Cir. 1990) (explaining that “[t]o demonstrate ‘market power,’ a plaintiff may show evidence of either ‘power to control prices’ or ‘the power to exclude competition’”); New York v. Anheuser-Busch, Inc., 811 F. Supp. 848, 873 (E.D.N.Y. 1993) (explaining that market share is “not the sole determining factor” for market power, but market power requires a “certain minimum market share”).
• 365 U.S. at 327-28 (stating “the threatened foreclosure of competition must be in relation to the market affected”).
• See, e.g., Eastman Kodak Co. v. Image Tech. Servs., 504 U.S. 451, 488 (1992) (Scalia, J., dissenting) (“Where a defendant maintains substantial market power, his activities are examined through a special lens: Behavior that might otherwise not be of concern to the antitrust laws—or that might even be viewed as procompetitive—can take on exclusionary connotations when practiced by a monopolist”).
• 253 F.3d 34, 70 (D.C. Cir. 2001).
• See Amex, 585 U.S. at 531, 546-57; Microsoft, 253 F.3d at 70.
• ZF Meritor, 696 F.3d at 277-79, 283.
• 509 U.S. at 222-24.
• Id. at 223, 226.
• 515 F.3d at 906; see 509 U.S. at 222-24.
• See PeaceHealth, 515 F.3d at 906.
• ZF Meritor, 696 F.3d at 277; see 509 U.S. at 222-24; 515 F.3d at 906.
• ZF Meritor, 696 F.3d at 277-79, 283.
• Id. at 277, 281-84.
• 399 F.3d at 191-96.
• 783 F.3d at 834-35, 838-41.
• See Plaintiff FTC’s Mem. in Supp. of Mot. for Partial Summ. J., supra note 8, at 7; Surescripts, 424 F. Supp. 3d at 95-96.
• See ZF Meritor, 696 F.3d at 277; Sabre, 938 F.3d at 59-63; Visa, 788 F. Supp. 3d at 611-12.
• 424 F. Supp. 3d at 102-04.
• 788 F. Supp. 3d at 611-12.
• Jacobson, supra note 42, at 338.
• See id.
• 585 U.S. at 535.
• Amex, 585 U.S. at 530-31, 547-49; see Sabre, 938 F.3d at 59-63; Jacobson, supra note 42, at 311-12.
• See Amex, 585 U.S. at 529-30.
• See id.
• See id. at 547-49; Sabre, 938 F.3d at 59-63.
• See Jacobson, supra note 42, at 338; Tampa Elec., 365 U.S. at 328-29.
• 938 F.3d at 59.
• Id.
• 424 F. Supp. 3d at 102-04.
• See Amex, 585 U.S. at 547.
• Id. at 544-46.
• 938 F.3d at 57-59.
• Hovenkamp, supra note 88, at 59-61.
• Id.
• See id.; Sabre, 938 F.3d at 57-58, 61-63; Amex, 585 U.S. at 544-46.
• See 585 U.S. at 544-46.
• Id. at 567-68.
• 938 F.3d at 62, 66.
• SeeGrinnell, 384 U.S. at 570-71.
• See Tampa Elec., 365 U.S. at 328; Dentsply Int’l, 399 F.3d at 191-96.
• 938 F.3d at 62, 66-67.
• 608 F. Supp. 3d at 642, 644-46.
• See Brooke Group, 509 U.S. at 223.
• See ZF Meritor, 696 F.3d at 271-77.
• See 585 U.S. at 530, 544-46.
• Id. at 530.