The district court ruled that American Express’s “anti-steering” provisions stifled price competition and violated the antitrust laws (Mastercard and Visa settled with the government before trial). But when American Express appealed, the Second Circuit reversed, relying on a new concept to create a special set of rules. The concept is that players in “two-sided” markets are unique because they serve different sets of customers in distinct but related markets, effectively facilitating transactions. American Express, for example, charges both merchants who accept its cards and consumers who use them. Using this concept, the Second Circuit held that the government would have to show that any price increases for merchants also harmed cardholders, or at least didn’t benefit them. In effect, the court introduced a dramatically new rule, making it much more difficult to win important antitrust cases and to stop anticompetitive behavior.

The case is now at the Supreme Court. If affirmed, the Second Circuit decision would create de facto antitrust immunity for the most powerful companies in the economy. Since internet technologies have enabled the growth of platform companies that serve multiple groups of users, firms like Alphabet, Amazon, Apple, Facebook, and Uber are set to be prime beneficiaries of the Second Circuit’s warped analysis. Amazon, for example, could claim status as a two-sided platform because it connects buyers and sellers of goods; Google because it facilitates a market between advertisers and search users. (An industry trade group representing the tech platforms filed an amicus brief in support of American Express.) Indeed, the reason that the tech giants are lining up behind the Second Circuit’s approach is that — if ratified — it would make it vastly more difficult to use antitrust laws against them.

The fact that the tech platforms could effectively be shielded from antitrust is troubling because, in several respects, these firms enjoy dominant market positions that makes antitrust scrutiny of their conduct especially important. By virtue of providing increasingly critical services, tech giants wield immense leverage over the sellers and buyers that rely on their platforms. This power is ripe for abuse. If the Supreme Court ratifies the Second Circuit’s approach, platforms will be able to engage in anticompetitive activity with one set of users, so long as they can plausibly claim that harmful conduct enabled them to benefit another group. Say, for example, that Uber prohibited its drivers from also serving rivals like Lyft, suppressing driver income. Under the current approach, these exclusive agreements would likely violate antitrust law. But under the Second Circuit’s analysis, the case would go nowhere unless plaintiffs could show that this practice also harmed riders.