Law:

Section:

(a) Competition law--- ----Unreasonable restraint on trade---'Rule of reason'---Principles---Credit card company---'Antisteering provisions' in contracts with merchants---Credit card companies operated a "two-sided platform", providing services to two different groups (cardholders and merchants) who depended on the platform to intermediate between them---Cardholders benefited from holding a card only if that card was accepted by a wide range of merchants, and merchants benefited from accepting a card only if a sufficient number of cardholders used it---Cardholder and the merchant both, ,thus, depended on widespread acceptance of a card-credit card company, which had a significant share of the total credit-card transaction volume in the country (United States), competed with its rivals by using a different business model, which focused on cardholder spending rather than cardholder lending---To encourage cardholder spending, respondent-company provided better rewards than the other credit-card companies, which was only possible by charging merchants higher fees than its rivals---Such higher fees caused friction between respondent-company and merchants---To avoid higher fees, merchants often attempted to dissuade cardholders from using cards of respondent-company at the point of sale - a practice known as "steering"-company placed antisteering provisions in its contracts with merchants to combat this---Plaintiffs sued respondent-company, claiming that its antisteering provisions violated the prohibition on unreasonable restraints of trade [section 1 of the Sherman Antitrust Act, 1890]---District Court agreed, finding that the credit-card market should be treated as two separate markets-one for merchants and one for cardholders-and that respondent-company's antisteering provisions were anticompetitive because they resulted in higher merchant fees---Appellate Court reversed findings of District Court determining that the credit-card market was one market, not two, and that respondent-company's antisteering provisions did not violate the prohibition on unreasonable restraints of trade---[Per Thomas, J (Majority view): Restraints on trade [as under section 1 of the…

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