Hearing comin up in the US Supreme Court soon.
By AnnaMaria Andriotis and
Updated Oct. 16, 2017 3:51 p.m. ET
WASHINGTON—The Supreme Court intervened in a high-stakes case for the credit-card industry Monday, saying it will review a government antitrust challenge to American Express Co. AXP 1.49% rules that bar merchants from steering customers to cards that charge lower fees.
The court’s move marks the latest turn in a long-running antitrust case against the credit-card giant. At issue are the fees that AmEx charges merchants when consumers use its cards at their stores. AmEx’s card policy says that merchants that choose to accept AmEx cards can’t steer consumers to use cards on other networks, like Visa V 2.12% or Mastercard .
Federal and state antitrust enforcers have argued the AmEx rules are an unlawful restraint on trade. AmEx disputes the allegations and says its rules are good for cardholders.
The company appeared to have the upper hand in the litigation last year after winning a major decision from the Second U.S. Circuit Court of Appeals in New York. That ruling reversed a trial judge who said AmEx violated U.S. antitrust law because it didn’t allow stores that accept AmEx cards to encourage shoppers to use cheaper cards.
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“The earlier decision by the Second Circuit panel protects a consumer’s right to choose how they pay, prevents our card members from being discriminated against and promotes competition in the payments industry,” a spokesman for AmEx said in a statement. “With the Supreme Court’s decision to take up this case, we will continue to vigorously defend the Second Circuit’s decision in favor of American Express.”
Retailers and states praised the Supreme Court’s decision. “Retailers have long said AmEx’s rules are an antitrust violation that deny consumers truthful information about their credit cards,” according to a statement Monday from the Retail Litigation Center.
“The issues in this appeal involve anticompetitive practices that hinder Ohio consumers and Ohio retailers and merchants. We look forward to making our arguments before the court,” Ohio Attorney General Mike DeWine said.
The Justice Department first sued AmEx in 2010, one of the early headline cases for U.S. antitrust enforcers in the Obama administration. The Trump Justice Department, however, took a different tack and chose not to continue the fight. It declined to seek Supreme Court review and urged the justices not to consider the ongoing appeal by attorneys general from 11 states, led by Ohio.
Trump officials said the appeals court made errors in ruling for AmEx, but nevertheless said the case didn’t merit high court review. The states disagreed, arguing the case deserved the Supreme Court’s attention.
The justices agreed with the states. In a brief written order issued Monday, they said they would hear the case. Oral arguments are expected early next year and a decision is expected by the end of June.
AmEx shares fell more than 1% Monday after the Supreme Court’s announcement.
The stakes are high for AmEx. The fees it charges retailers are often higher than for other cards. Some merchants choose not to accept AmEx cards as a result.
AmEx in recent years has been working on raising its merchant acceptance in part by lowering its so-called swipe fees. Still, a ruling against the company’s current policy could lessen the number of AmEx card transactions and related revenue. AmEx has said in recent securities filings that losing the case could have a material adverse effect on its business.
Visa and Mastercard settled similar government antitrust claims in 2010, agreeing to drop their policies that barred merchants from using discounts, rebates or other incentives to encourage customers to pay with cheaper cards.
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Jennie Paluka says "report McGarvie to IBAC"
18 hours 56 minutes ago #3513
What's unclear to the same Commissioner McGarvie and the CEO McGarvie? The landlord Jones wasn't evicted and Jones threatened to sue them for defamatorily inventing a cover up story to coneal the infomation they were handing out to owners of 'litigation service companies' of ex martial artists with boastful claims of their underworld connections. And the DEA arrested Ravelo's narcotics operation that passed Reserve Bank Australia info in the same "Antitrust" cases. And Justice Randall sacked the lawyers that semed to have McGarvie's backing.