Most Ignored and Most Far-Reaching Supreme Court Ruling Yet: Anti-Trust Law Hollowed Out

A major Supreme Court ruling, Ohio vs American Express, was completely ignored by most media outlets, even though it will have potentially devastating repercussions for consumers in the so-called ‘platform economy’: Uber, Lyft, AirBnB, Facebook, etc. NEP’s Bill Black explains the consequences. You can view with transcript here.

3 Responses to Most Ignored and Most Far-Reaching Supreme Court Ruling Yet: Anti-Trust Law Hollowed Out

  1. I read msm summaries of both the Amex and the “pregnancy crisis clinic” cases and knew that I would either have to read the originals or wait for a good exposition. I wish that yours had done the job, but instead of providing hard facts it settled for conclusions and metaphors. What you needed was an exposition of what Amex contracts forbade. For example–I am making this up– Amex forbade cash discounts; it forbade asking customers to pay with Visa or MC (that charge merchants lower fees); it forbade telling customers that Amex interest on unpaid balances is higher than Visa or MC. These contracts violated anti-trust laws because they constrain transparency (dissemination of information by a party) that allow the consumer to choose in his self-interest. [MG: I am guessing that the following is close to what you were trying to convey] Thomas’s “genius” was to invent the notion of a two-sided platform: on the one side stand the credit card companies and their dealings with the merchant, on the other side stands the consumer and his relationship with the merchant. Thomas ruled that the merchant–the man in the middle–could be constrained by contracts with the credit card companies from free and transparent interactions in his dealings with the consumer just so long as there was a transparent “free market” competition between himself and the credit card companies, i.e. all those “free market” competitors could then “independently” prohibit the merchant from offering a cash discount or revealing the interest rates charged on unpaid balances by the credit card companies. This ruling thus sanctifies collusion among competitors provided it is known to their customer (the merchant) and allows these “competitors” to deprive the consumer of the knowledge he needs to choose wisely on his own behalf. I am guessing, and dearly wish that it were not necessary to guess, but what you said below made it necessary to do so.

    [BEGIN QUOTE] What American Express did was a naked violation of the antitrust laws as they have always been understood. It by contract, directly interfered with price competition. That is the heart of an antitrust liability that would typically be subject to what we call per se liability. In other words, you don’t have to prove harm because it is such an obvious interference. So, this should have been an easy case. Second, as you say, they invented a new doctrine, ignoring all the district court’s findings of fact. And the new doctrine said, “Oh, normal antitrust principles, competition, they don’t really apply to massive sectors of the economy.” Indeed, we are talking about the largest sectors of the economy that affect you as a regular human being, literally trillions of transactions.”[END QUOTE]

    In the case of the fake unlicensed “pregnancy crisis clinics” that are run by religious right-wing anti-abortion zealots often dressed up as doctors and nurses (which they are not), the State of California required that vulnerable young women who came there be informed of the availability of abortions (which most of them were seeking) at genuine medical clinics with their locations. The Supremes ruled that this one-actor trust (the fake clinics) be permitted to continue its charade by keeping its secret to itself, declaring unconstitutional the state requirement that such phony clinics disclose the availability of abortion facilities on the grounds that it violated the phony clinics’ First Amendment Rights to free speech. The first decision reflects unfettered capitalism (of many stripes) while the second reflects unfettered right-wing anti-abortion Christianity. Both simply truss up unprincipled ideology as constitutional law and reflect the core disposition of the Supreme Court.

  2. madame defarge

    I am afraid that we blew it when Stockton California and Jefferson County Alabama were financially raped by Wall Street.. There was collusion there preventing these entities from getting competitive bids and the bankrupcies were a direct result… This should have been pursued to the Supreme Court and then we would not be sitting here on our thumbs… Just like any other list of Sentinel Failures to protect the bottom 90% over the last 40 years. Like the increase in the Percentage of SS withholding without requiring any realistic increases in the SS cap and besides that applying it to so called passive income…. and the Clintons bowing to Rubin on the S&L prosecutions, I personally would like any information about how many cases were dropped by them …..

  3. Wade Riddick

    I had pretty much the same analysis when I first heard about it. Clarence Thomas really demonstrated the economic ignorance of the majority by claiming that bringing together buyers and sellers in a network is some kind of unique feature of digital platforms. It is, in fact, ancient. Hence the very basis of the ruling sets up an attack on stock exchange regulations and common carrier regulations dating back centuries. It’s absolutely absurd to read this kind of nonesense from a “high” court.

    I suspect they might even shoehorn this logic into legalizing insider trading and high frequency front-running, not to mention enshrining the terrible dual-pricing problems in telecoms by making all network neutrality laws per se unconstitutional. I really think enabling a corporate crime wave this brazenly is their true goal in the long run. This last court term really disabused those few lawyers still clinging to the quaint notion of a non-partisan court. These decisions benefitted Republicans and their donors straight down the line.

    It’s also deeply contradictory to rule that unions can’t make members pay for wage negotiations because that forces a worker to say something he doesn’t want to, yet the court majority then turn around and says it’s perfectly acceptable for another private actor, AMEX, to gag small business with its contracts.