American Express to appeal against antitrust ruling
20 February 2015 | 6268 views | 0
American Express is to appeal a US Federal Court ruling that its exclusivity conditions constitute an unlawful restraint of trade, contending that the judgment would harm competition by further entrenching the two dominant payment networks, Visa and MasterCard.
The case against Amex was brought by the US Department of Justice, which argued that the card scheme's rules prohibiting merchants from accepting alternative cards with lower fees was a violation of anti-trust laws.
In a statement noting its intent to appeal, the company said: "Only a small percentage of Visa and MasterCard holders carry American Express cards. By contrast, most American Express Card Members carry a competing card in their wallet. Today’s decision means merchants would be able to steer customers to use Visa and MasterCard, while it would be virtually impossible to steer away from them.”
The court's decision was met with delight by merchant groups.
“Today’s ruling is one step forward to bringing badly-needed competition and transparency to the entire credit card industry," says the Merchant Payments Coalition. "Allowing retailers to ask consumers to use a less expensive card will result in lower prices for consumers and a fairer market for the fees merchants currently pay to accept credit and debit cards."
Visa and MasterCard avoided legal action by agreeing to allow retailers to use discounts and other incentives to encourage consumers to use alternative cards.