The US government was joined by 17 states in a 2010 antitrust suit, alleging that American Express rules preventing merchants from steering customers to cards with lower processing costs violate federal law. The New York-based lender said it needs the policy to remain competitive and uses the swipe fees it collects to pay for customer rewards and provide services for merchants like fraud-prevention programs.
Visa Inc. and MasterCard Inc., the two biggest US payments networks, settled with the US Department of Justice in 2010, allowing merchants to reward consumers for paying with lower-cost credit or debit cards. These swipe fees are also known as interchange or merchant discount fees.
Credit-card interchange fees, long a sore point with merchants, total about $50 billion a year in the United States, according to the government. Do you think American Expressâ€™s behavior with respect to these swipe fees is anticompetitive under the antitrust laws?