The Justice Department may have left its skirmish against American Express and the issue of “steering,” but nearly a dozen states are battling on against the card issuer in their own fight.
On Friday, the Justice Department announced that it would not seek U.S. Supreme Court review of its antitrust case against American Express, The Wall Street Journal reported. The case began in 2010, when the Justice Department filed suit alleging that the American Express policy of “no steering” – in which merchants cannot nudge consumers toward using the cards on other networks such as Mastercard’s – hurt competition.
The states that decided this week to press on with their case had joined as plaintiffs with the Justice Department.
In the wake of the DOJ’s decision, American Express said in a statement: “We believe the DOJ’s decision not to proceed sends a strong signal that this seven-year litigation should come to an end.”
In major rulings tied to the case, a federal appeals court ruled in September for Amex. The federal appeals court reversed a previous ruling that found the card company had violated antitrust rules with its steering policy because merchants were in effect discouraged from moving shoppers to use cheaper cards on networks including Visa and Mastercard, and fees paid by merchants to Amex were higher, too, as a result. Fees that merchants pay for processing transactions are estimated to bring in about $50 billion annually, the government has reported.
The states that are continuing with the case are: Ohio, which is the lead plaintiff, Idaho, Illinois, Iowa, Connecticut, Maryland, Michigan, Montana, Rhode Island, Utah and Vermont.
Amex, for its part, has said in past financial filings that the outcome of the case could have material effects on its results. In addition, in the wake of the most recent news tied to the DOJ and states’ decisions, Amex has said that it “will continue to vigorously defend” the decision handed down by the appeals court, which it said “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.”