The Supreme Court on Monday rejected federal and state government arguments that said American Express violated antitrust regulations by requiring merchants not to steer customers to other cards.
The ruling pitted conservative justices versus liberals, and Justice Clarence Thomas wrote for the 5-4 majority that American Express’ contracts “do not unreasonably restrain trade.” The ruling is just the latest in a long-running war between merchants and credit card providers.
The U.S. government and several state governments had sued American Express for violating antitrust law for stipulating in contracts that merchants could not incentivize customers to use other credit cards with lower fees.
But Thomas and the other conservative justices found that the anti-steering provisions haven’t harmed competition and consumers.
American Express shares jumped as much as 4 percent on the news.
“As card networks serve both consumers and merchants, regulation favoring one harms the other,” said Jeff Tassey, chairman of the board of the Electronic Payments Coalition, a group that represents card providers and banks. “Today’s decision establishes the need for policymakers to account for the interdependent nature and competitive realities of two-sided markets, undo harmful regulation, and reject future attempts by one party trying to gain unjust benefits at the expense of the other.”
