Legal

DOJ Granted Approval To Delay Petition To Reexamine Amex Case

The U.S. Department of Justice’s (DOJ) Antitrust Division has reportedly received approval to delay the deadline to file a petition for a writ of certiorari over the 2nd U.S. Circuit Court of Appeals’ decision in the years-old antitrust case against American Express.

In short, the rules that American Express imposes prevent merchants from encouraging customers to use lower-cost cards. The Retail Litigation Center (RLC) and the National Retail Foundation have said the practice violates antitrust rules and makes it hard for merchants to get lower fees from 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. “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.”

Back in January, the 2nd U.S. Circuit Court of Appeals, without comment, reversed a lower court’s ruling that struck down the anti-steering rules put forth by American Express. A writ of certiorari issued by the DOJ would mean that a higher court would be given access to the documents from the case as a means to review the decision.

By delaying the deadline, the Department of Justice is seeking time to acquire staffing and new leadership under the Trump Administration, said Law360. The DOJ now has until May 5 to file a petition.

In the previous case, the Justice Department argued that the appeals court focused on how the Amex rule impacted customers and merchants, not merchants alone. 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.

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