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Supreme Court Justice Clarence Thomas. Photo: Alex Wong/Getty Images

The ripples of a Monday Supreme Court ruling in favor of American Express could be felt on the West Coast, with some arguing it would make it harder for antitrust enforcers to take on big online platforms like Google, Facebook and Amazon.

Why that matters: Many of tech’s most profitable firms have created two-sided markets: Google and Facebook serve consumers on one side and marketers on another. Uber links up riders and drivers. Amazon serves customers and also the merchants who use its platform. All these situations make defining a monopoly more difficult.

Justice Clarence Thomas agreed with a lower court that when making an antitrust call on a company that does transactions across a two-sided marketplace, you have to consider whether the whole enterprise is anticompetitive — not just one side of the market. (The case in question concerned American Express' policy discouraging merchants who tried to push customers to use cards with lower merchant fees.)

Yes, but: Thomas split up companies that create two sided markets into two categories, and only applied his analysis to one of them.

  1. He said that his analysis could be applied to “two-sided transaction platforms” that “facilitate a single, simultaneous transaction between participants," including Amex.
  2. But he argued that the courts could consider only one side of a two-sided marketplace “when the impacts of indirect network effects and relative pricing in that market are minor,” as is true with a newspaper where readers and advertisers aren’t selling anything directly to one another.

Category #2 could be seen as covering Facebook and Google, said Lina Khan, the Director of Legal Policy at the Open Markets Institute, as opposed to companies like Amazon that set up more direct transactions between buyer and seller. “I think instances where you have targeted advertisements funding another business that you’re providing to a user, I think those types of cases would risk falling into the type of category that Thomas tries to create,” she said of his reference to newspapers.

Khan, who argues for more vigorous antitrust enforcement, said she worried Thomas’ ruling creates a murky standard where companies will argue they fall into Category #1 to avoid antitrust enforcers.

The other side: “This case, for the tech industry, simply represents a clarification of the dynamics of two-sided business models captured in a legal decision,” said Marianela López-Galdos, Director of Competition and Regulatory Policy at CCIA, a tech lobbying group that filed a legal brief supporting some of Amex’s case. “I don’t think it gives a free pass to the tech industry.”

What’s next: Cowen Washington Research Group analyst Paul Gallant wrote in a Monday evening note that he’ll be watching for reaction from DOJ antitrust chief Makan Delrahim and Federal Trade Commission chairman Joe Simons — who is going to hold public hearings on the competitive impact of tech platforms — to see how the ruling could affect their approach to tech cases.

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Go deeper

U.S. economy added 379,000 jobs in February

A construction worker at the World Trade Center construction site earlier this year. Photo: Michael Nagle/Xinhua via Getty Images.

The economy added 379,000 jobs in February, while the unemployment rate dropped to 6.2% from 6.3%, the Labor Department said on Friday.

Why it matters: The first Biden-era jobs report shows hiring surged as coronavirus cases eased — though a full recovery remains far off. Economists expected the economy to add roughly 182,000 jobs last month, after adding a paltry 49,000 in January.

This story is breaking news. Please check back for updates.

Dion Rabouin, author of Markets
56 mins ago - Economy & Business

Workers are getting a really bad deal

Illustration: Eniola Odetunde/Axios

This week's spate of data highlighted the difficulties Americans who have lost their jobs have had bouncing back from the coronavirus pandemic, and just how much those who have managed to keep their jobs have been working.

What's happening: The Labor Department reported Thursday that the productivity of American workers fell by a revised 4.2% annual rate in the fourth quarter, the largest decline in 39 years.

FBI: Trump appointee arrested in connection with Capitol riot

Photo: Samuel Corum/Getty Images

The FBI on Thursday arrested former State Department aide Federico Klein, a Trump appointee who worked on the former president's 2016 campaign, on charges related to the Jan. 6 storming of the Capitol, according to a court filing.

Why it matters: The 42-year-old Klein is the first member of the Trump administration to be arrested in connection with the insurrection, which led to the former president's second impeachment and charges against over 300 people.