[ad_1]
The US Supreme Court dismissed a lawsuit filed by the government accusing American Express Co. of countering competition by banning traders from directing customers to cheaper cards.
The judges, voting 5-4, said the US government and 11 states have failed to prove that American Express rules are hurting cardholders as well as merchants. American Express jumped 2.95% in New York. Visa Inc. lost 2.4% and Mastercard Inc. lost 2.3%.
"The increase in fees of Amex traders reflects the increase in the value of its services and the cost of its transactions, not an ability to charge above a competitive price" , wrote judge Clarence Thomas for the court. The case divided the court along ideological lines, with the four dissenting Democratic appointments.
The decision preserves the high-profile business model of American Express and is a blow to retailers looking to reduce the $ 50 billion costs they pay to credit card companies each year. This is a defeat for Discover Card Services, which said the rules reduced its ability to compete with American Express.
"The Supreme Court's decision is a major win for consumers and for American Express," said an American Express release. "This will help promote competition and innovation in the payments industry."
The case was closely watched in Silicon Valley because of the prospect that it could isolate technology giants such as Facebook Inc. and Amazon.com Inc. from certain antitrust lawsuits.
The case is Ohio c. American Express Co., 16-1454.
– With the help of Alexa N Green
Source link
