Today, the Supreme Court granted certiorari in the following cases of interest to the business community:
Stored Communications Act—Extraterritorial Application
United States v. Microsoft Corp., No. 17-2
The Stored Communications Act permits the government to procure warrants to obtain information from providers of electronic communications services or remote computing services, when it has probable cause to believe that a crime is being committed. Today, the Supreme Court agreed to resolve a dispute concerning whether the Stored Communications Act applies extraterritorially, to information stored outside the United States. The particular dispute concerns a warrant issued to Microsoft Corp. for emails stored at its datacenter in Ireland.
Sherman Act—Rule of Reason
Ohio v. American Express Co., No. 16-1454
As part of its standard contractual agreement, AmEx prohibits the merchants in its network from incentivizing their customers to use credit cards that charge lower processing fees. A dozen states challenged the practice under federal antitrust law. After the district court found a violation of Section 1 of the Sherman Act, the Second Circuit reversed. Applying the so-called "rule of reason," a burden-shifting scheme that requires the plaintiff to make a prima facie showing that a practice is anticompetitive before affording the defendant an opportunity to demonstrate the pro-competitive benefits, the Second Circuit held that the plaintiff States could not shift the burden to AmEx merely by showing by that the anti-steering rules inhibited price competition among credit-card networks; in the view of the Second Circuit, the States needed to show, more globally, that the merchant-side anticompetitive effects (i.e., the absence of benefits from merchants) were not outweighed by any cardholder-side pro-competitive effects (like the prospects of obtaining cash-back and point rewards). The Supreme Court has granted the States' petition and is expected to clarify the application of the antitrust rule of reason.
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