US: AmEx wins antitrust appeal

A federal appeals court tossed an antitrust judgment against American Express Co. on Monday, ruling the credit card company can bar merchants from steering customers toward using other credit cards with lower fees.

The ruling is a significant win for AmEx, which had appealed a 2015 judgment from Brooklyn U.S. District Judge Nicholas Garaufis who found anti-competitive AmEx’s policy of not allowing its merchants to promote other cards.

Garaufis’ ruling last year meant that merchants who accept AmEx would be permitted to encourage customers to use other, potentially cheaper, cards such as ones by Visa Inc. and MasterCard Inc. Merchants also could offer discounts to shoppers for using cards other than AmEx and post signs that specify which card they prefer.

“This approach does not advance overall consumer satisfaction,” the three judge panel wrote in a 66-page opinion. “Though merchants may desire lower fees, those fees are necessary to maintaining cardholder satisfaction—and if a particular merchant finds that the cost of Amex fees outweighs the benefit it gains by accepting Amex cards, then the merchant can choose to not accept Amex cards.”

(Read the full decision here)

Full Content: The Wall Street Journal

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