Legal

Amex Wins Another Round on Antitrust Case

The U.S. government’s request to a federal appeals court to rethink a ruling that paves the way for American Express to prevent merchants from steering customers to credit cards that have lower fees was struck down Thursday (Jan. 5).

According to a report by Reuters, the 2nd U.S. Circuit Court of Appeals, without comment, chose to let its reversal of a lower court’s ruling that struck down the anti-steering rules put forth by Amex stand. Reuters noted the government can still request the U.S. Supreme Court hear the case. Seventeen states are against the Amex rules, reported Reuters. The Justice Department had argued the appeal court focused on how the Amex rule impacted customers and merchants, not merchants alone, who are hit with the fees. Merchants pay greater than $50 billion in annual fees to process credit card transactions, and often, those fees are passed onto consumers in the form of higher prices, noted the report.

Amex’s rule is also facing pushback from other groups who wanted the 2nd U.S. Circuit Court of Appeals to rethink the ruling. In November, the Retail Litigation Center (RLC) and the National Retail Federation (NRF) requested the full 2nd U.S. Circuit Court of Appeals take up a lawsuit over rules that prevent retailers from encouraging customers to use credit cards that don’t have as high of processing fees. In a press release, the Retail Litigation Center and the National Retail Foundation said the practice violates antitrust rules and makes it hard for merchants to get lower fees from the major credit card companies in the U.S.

“While intense competition is a hallmark of the retail industry, it is largely absent from the credit card market, where fees continue to skyrocket,” said RLC President Deborah White in the press release. “American Express stifles competition by imposing rules that deny merchants the ability to incentivize customers to use lower cost cards and, by doing so, increases costs for all customers. Consumers should have visibility into the cost of transactions and the opportunity to take action to limit them if they so choose.”

——————————–

Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our February 2019 B2B API Tracker Report 

Click to comment

TRENDING RIGHT NOW

To Top