In the early 1970’s antitrust was dominated by per se rules; in United States v. Topco Associates (1972) the Supreme Court ridiculed the use of economics. Shortly thereafter, however, the Court shifted ground, making economics the touchstone of antitrust analysis outside the cartel context. Ohio v. American Express carries two reassuring messages for antitrust: first, sound economic analysis remains central to the Court’s antitrust approach. Second, the decision shows seasoned judgment in assessing conflicting economic arguments involving new and complex industries. Specifically, the decision is the first that shows the Court’s understanding of deep economic insights traceable to earlier path breaking work of William F. Baxter. While studying multi-party payment systems (electronic funds transfer and general-purpose credit cards) Baxter became the first to recognize the distinct character of “two-sided” markets and to explain why sound economic analysis requires holistic consideration of all aspects of industries that involve such markets.
