Digital Transactions Authoritative, insightful and timely information for payments professionals
By John Stewart
@DTPaymentNews
A landmark anti-steering case against American Express Co. is going to the U.S. Supreme Court. Attorneys general from 11 states have asked the high court to review a decision handed down in September by a federal appeals court that upheld AmEx’s policy of banning merchants from steering customers away from AmEx and toward lower-cost payment methods. The U.S. Department of Justice, which had also pressed an antitrust case against the card company on the same grounds, is not asking the Supreme Court to review the September decision, according to The Wall Street Journal.
The 11 states petitioning the high court are: Connecticut, Idaho, Illinois, Iowa, Maryland, Michigan, Montana, Ohio, Rhode Island, Utah, and Vermont, with Ohio acting as lead state. In the original case, which began in 2010, 17 states sued AmEx.
The states and the DoJ scored a signal victory in February 2015 when a federal court in Brooklyn, New York, ruled that AmEx’s prohibition against steering violated the Sherman Antitrust Act. But the appellate court decision reversed that ruling and appeared to give AmEx a free hand to prevent merchants from steering customers. With significant acceptance-fee revenue at stake, AmEx in a statement Friday said it will “continue to vigorously defend” the appellate court decision, according to the Journal.
At issue are so-called non-discriminatory provisions imposed by AmEx that ban merchants from inducing customers who present an AmEx card to use another card or payment method instead. The appellate court based much of its reasoning on the notion that networks like AmEx must do business not only with merchants but also with cardholders, and that the offers and rewards necessary to attract consumers and get them to spend on the card ultimately benefit merchants at the network’s expense.
