U.S. loses bid to overturn AmEx antitrust decision

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By Jonathan Stempel | NEW YORK

NEW YORK A federal appeals court on Thursday
rejected the U.S. government’s request that it reconsider its
decision allowing American Express Co to stop merchants
from encouraging customers to use rival cards that charge lower
fees.

Without comment, the 2nd U.S. Circuit Court of Appeals let
stand its Sept. 26 reversal of a lower court ruling that had
struck down AmEx’s “anti-steering” rules.

That reversal by a three-judge panel allowed New York-based
AmEx to block merchants that accept its cards from steering
customers to rivals Visa Inc and MasterCard Inc,
even if the move saved them money.

A spokesman for the U.S. Department of Justice declined to
comment. The government can still ask the U.S. Supreme Court to
take up the case.

At issue were the more than $50 billion of fees that
merchants pay annually to process transactions, and which can be
passed along to customers through higher prices.

The Justice Department said that in ruling for AmEx, the
appeals court wrongly focused on how the company’s policy
affected customers and merchants, rather than merchants alone.

It also said it should have been AmEx’s burden to show that
the policy promoted competition, not the government’s burden to
show otherwise.

Several dozen companies included Kroger Co, Target
Corp and Walgreens Boots Alliance Inc supported
the government’s bid for a rehearing by the original panel, or
by all of the appeals court’s active judges.

AmEx accounted for 26.4 percent of U.S. credit and charge
card purchase volume in 2013. Visa and MasterCard settled
similar lawsuits in 2011 by agreeing to change their rules.

The case is U.S. et al v. American Express Co et al, 2nd
U.S. Circuit Court of Appeals, No. 15-1672. (Additional reporting by Nate Raymond)



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