Document Type

Article

Publication Title

Nebraska Law Review

Abstract

Justice Gorsuch began the oral argument in Ohio v. American Express with pointed questions on consumer welfare, output, and deadweight loss. Justice Breyer began his dissent with a spirited defense of the “American approach” to using antitrust litigation, rather than government regulation, to restrain the power of the “great trusts.” But what did either have to do with the actual decision in the case and why did the two Justices stake out these positions so dramatically? In this paper I explore the how the debate over goals — framed by Justices Gorsuch and Breyer — affected the application of antitrust’s rule of reason to an asserted new economic phenomenon, two-sided platforms. Although the case presented an opportunity for the Court to clarify the application of the rule of reason and to speak to the debate on goals currently roiling antitrust, the Court did a poor job on both. Instead, the Court’s opinion muddled the rule of reason analysis and confused our understanding of what “consumer welfare” means. The paper begins with a general discussion of the debate over the consumer welfare standard. In the second part I discuss the rule of reason analysis that the Court applies in its decision; the third part examines the effect of two-sidedness on this analysis. In the fourth part I return to consumer welfare and its confusing use in American Express. My conclusion argues that the proper use of a consumer welfare standard in American Express, employed to advance economic and political values, would have emphasized that American Express caused economic harm to consumers and deprived them of their ability to make free choices in marketplace transactions.

First Page

319

Volume

98

Publication Date

2019

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