American Express is defending its high interchange fees in court against claims by the US Department of Justice that those fees harm competition, according to reports.
AmEx president of the company’s US consumer services business Joshua Silverman testified in court this week to defend those high fees, arguing that they are crucial to the credit card company’s unique rewards program, which gives AmEx its competitive edge over rivals.
Being forced to lower those fees “would be disastrous, and we would have to rethink everything in our business model,” Silverman told US District Judge Nicholas Garaufis on Monday.
But the DOJ claims that those fees harm competition because they impose unfair rules on merchants that block those merchants from encouraging customers to use credit cards with lower swipe fees like Visa and MasterCard.
But American Express says that its top rivals Visa and MasterCard are too big to be harmed by AmEx’s merchant agreements. According to the company, Visa and MasterCard hold a combined 1 billion cards in the country; AmEx, in comparison, has about 55 million.
According to reports, the DOJ’s suit against AmEx is the first time a credit card company has faced trial on allegations that swipe-fee rules violate antitrust law.
Full content: Bloomberg
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
UFC Reaches $375 Million Settlement in Antitrust Case
Feb 6, 2025 by
CPI
Brazilian Architecture Council Convicted of Antitrust Violations
Feb 6, 2025 by
CPI
Bipartisan Bill Seeks to Ban Chinese AI Software from US Government Devices
Feb 6, 2025 by
CPI
Senators Call for Investigation into RealPage Algorithm’s Impact on Military Housing Costs
Feb 6, 2025 by
CPI
ECB Seeks Faster Digital Euro Legislation Amid US Stablecoin Push
Feb 6, 2025 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – International Criminal Enforcement
Jan 23, 2025 by
CPI
The Antitrust Division’s Recent Work to Combat International Cartels
Jan 23, 2025 by
Emma Burnham & Benjamin Christenson
Information Sharing: The New Frontier of U.S. Antitrust Enforcement
Jan 23, 2025 by
Brian P. Quinn, Casey Kovarik & Michael Tubach
The Key Role of Guidelines on Exchanges of Information Among Competitors and the Divergent Transatlantic Paths
Jan 23, 2025 by
Rosa Abrantes-Metz & Albert Metz
Leniency, Whistleblowers, and Compliance
Jan 23, 2025 by
Richard Powers, Tara O’Malley & Cory Gordon