American Express, Antitrust Violation, New York 2015

Grimy Times Exclusive

American Express, a global financial services company, has been ordered to eliminate its anti-steering rules by a U.S. District Court in New York.

According to the court's order, American Express will no longer be able to block merchants from encouraging their customers to use a particular credit card. This ruling is a significant victory for merchants, who pay over $50 billion in credit card fees annually.

The court's order also requires American Express to repeal any rules that block merchant steering, notify merchants of their freedom to engage in steering activities, and adopt compliance measures to ensure that its employees understand that they cannot continue to block steering by merchants that accept American Express cards.

The U.S. Department of Justice and 17 state attorneys general sued American Express, Visa Inc. and MasterCard International Inc. in 2010 to eliminate restrictions that the three credit card networks imposed on merchants. The civil case, brought under Section 1 of the Sherman Antitrust Act, sought to end the violation and to restore competition.

American Express was not a party to the settlements filed with Visa and MasterCard in 2010, and the litigation against American Express continued. The court approved the settlements on July 20, 2011, and they applied immediately to Visa and MasterCard.

Over the course of a seven-week trial during the summer of 2014, the department presented evidence that these restrictions obstruct merchants from using competition to try to keep credit card fees from increasing. On Feb. 19, 2015, Judge Nicholas G. Garaufis of the Eastern District of New York issued a decision finding that American Express violated Section 1 of the Sherman Act.

Defendant: American Express
Criminal Charges: Violation of Section 1 of the Sherman Act
City and State: New York
Exact Date: Feb. 19, 2015
Sentence: Ordered to eliminate anti-steering rules, pay $50 billion in credit card fees annually
Dollar Amounts: $50 billion in credit card fees annually

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Source: https://www.justice.gov/archives/opa/pr/statement-acting-assistant-attorney-general-leslie-overton-courts-remedy-address-american