A federal court judge in Brooklyn has ruled that American Express engages in anti-competitive behavior by requiring that merchants accepting its cards not encourage their customers to use cards with lower merchant fees than American Express, according to The New York Times.
The rules are "an unlawful restraint on trade," according to the ruling by Judge Nicholas Garaufis.
Many retailers are torn between accepting American Express for the convenience it offers some customers, and the higher costs that brings. This ruling offers the option of accepting American Express, but offering incentives for customers to use other cards, or simply requesting that they do so.
Retailers were pleased with the results, according to a statement from the Merchants Payment Coalition, a retailer advocacy group. "Today’s ruling is one step forward to bringing badly-needed competition and transparency to the entire credit card industry," it said.
American Express plans to appeal.
This is the second ruling favorable to retailers on card fees in recent years; a federal court ruled that debit card swipe fees were too high in 2013 (see "Court Ruling Cuts Swipe Fees").
'Unlawful Restraint on Trade'
Posted by ICv2 on February 24, 2015 @ 2:25 am CT
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