Amex Battles Antitrust Charges in Federal Court
July 10, 2014
American Express is in court in New York this week defending itself against federal antitrust charges stemming from a 2010 lawsuit. The original suit targeted not only American Express, but Visa and MasterCard as well, who immediately agreed to settle. That settlement turned into the controversial $5.7 billion agreement that won final approval last December. American Express tried to strike a separate agreement with merchants but the Justice Department did not agree it was sufficient.
The government is seeking to allow merchants that take American Express to use discounts and promotions to steer consumers to less expensive alternatives, which they say will enable them to charge consumers less. American Express contends it has invested billions to provide high-quality service and rewards to its cardholders, which help differentiate it from bigger competitors and justify the higher fees to merchants.
The non-jury trial is being presided over by Judge Nicholas Garaufis in U.S. District Court for the Eastern District of New York in Brooklyn. It is expected to last up to 10 weeks.