Judge rules against American Express in antitrust suit
Source: AP-Excite
By KEN SWEET
NEW YORK (AP) — American Express violated U.S. antitrust laws by barring merchants from asking customers to use one credit card over another, a federal judge ruled Thursday.
The case was a major blow to American Express, who argued that its policies kept it competitive against the larger payment networks Visa and MasterCard and their bank partners.
U.S. District Court Judge Nicholas Garaufis said in his ruling that American Express nondisclosure policies harmed competition and prevented merchants from trying to lower their credit card processing costs. He also said AmEx's policies kept consumers unaware how much using their credit cards cost merchants, which required merchants to pass along those costs in the form of higher prices.
At the center of the case are the fees merchants pay to process credit and debit cards, which have been largely hidden from the average consumer. Every time a credit or debit card is used at a merchant, the banks and payment networks would take a small percentage of the transaction as a fee.
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