University of Miami Business Law Review

Document Type



The Second Circuit ruled that American Express did not have market power because it operated in a two-sided market and any leverage it exercised over merchants derived from its successful competition for cardholders. As a result, the relevant market had to include both sides of a credit card transaction, the company’s market share was modest, and it could not exploit both merchants and cardholders. In Market Power and Antitrust Enforcement (forthcoming in B.U. L. REV.), I propose a new approach that infers market power from the likely effects of the challenged conduct. This approach shows that American Express clearly exercised market power. Its conduct prevented merchants from steering customers to cheaper credit cards and thus maintained merchant fees above the competitive level. I also explain why these high fees were not justified by the rewards programs the company provided to its cardholders.