July 03, 2014

Justice's suit against Amex goes to court

July 7, 2014 – A civil antitrust suit filed by the Justice Department against American Express four years ago – in response to the company's fee for merchants – is going to a New York federal court next week.

According to The Wall Street Journal, American Express uses the fees it charges merchants to fund reward and perk programs for customers, but the government alleges these fees are inhibiting competition and passing higher fees onto consumers.

The government suit was filed right after an agreement was set between Visa and Mastercard to allow merchants to offer discounts and rebates if consumers used cards with lower merchant fees and fewer rewards and perks. Under American Express regulations for merchants, they are still not allowed to tell consumers that they prefer one card to another.

Oral arguments will begin Monday in New York's eastern district federal court, in Brooklyn.