What’s in Your Wallet (and What Should the Law Do About It?)

42 Pages Posted: 17 May 2019 Last revised: 17 Apr 2020

See all articles by Natasha Sarin

Natasha Sarin

Yale University Law School and Yale School of Management

Date Written: 2020


In traditional markets, firms can charge prices that are significantly elevated relative to their costs only if there is a market failure. However, this is not true in a two-sided market (like Amazon, Uber, and Mastercard), where firms often subsidize one side of the market and generate revenue from the other. This means consideration of one side of the market in isolation is problematic. The Court embraced this view in Ohio v. American Express, requiring that anticompetitive harm on one side of a two-sided market be weighed against benefits on the other side.

Legal scholars denounce this decision, which, practically, will make it much more difficult to wield antitrust as a tool to rein in two-sided markets. This inability is concerning as two-sided markets are growing in importance. Furthermore, the pricing structures used by platforms can be regressive, with those least well-off subsidizing their affluent and financially-sophisticated counterparts.

In this Article, I argue that consumer protection, rather than antitrust, is best suited to tame two-sided markets. Consumer protection authority allows for intervention on the grounds that platform users create unavoidable externalities for all consumers. The Consumer Financial Protection Bureau (CFPB) has broad power to curtail “unfair, abusive, and deceptive practices.” This authority can be used to restrict practices that decrease consumer welfare, like the anti-steering rules at issue in Ohio v. American Express.

Keywords: consumer protection, antitrust, two-sided markets, network & bank interchange fees, merchant claims, anti-competitive harm, competition policy, market structure, credit cards, debit cards, Ohio v. American Express, Consumer Financial Protection Bureau, unfair, deceptive, & abusive acts, UDAAP

JEL Classification: E42, G18, K21, L13, L40, N22

Suggested Citation

Sarin, Natasha, What’s in Your Wallet (and What Should the Law Do About It?) (2020). University of Chicago Law Review, Vol. 87, p. 553, 2020, U of Penn, Inst for Law & Econ Research Paper No. 19-24, Available at SSRN: https://ssrn.com/abstract=3389505

Natasha Sarin (Contact Author)

Yale University Law School and Yale School of Management ( email )

127 Wall St.
New Haven, CT 06511
United States
2034325552 (Phone)
20001-4959 (Fax)

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