Sasha Farrell June 28, 2018

American Express won the merchant fee dispute with the U.S. Supreme Court’s backing. On Monday, the verdict has cleared American Express from using antitrust laws.

The ruling with a vote at five to four was made on Monday, giving American Express victory in its battle against major retailers. Charges that American Express was stifling competition unlawfully were negated by the ruling.

Justice Clarence Thomas has said that two-sided platforms are created by credit card networks. But Justice G. Breyer disagrees with the ruling saying that competition would be hit, especially with internet purchase and sales increasing.

The swipe fees that credit card companies charge when purchases are made from their cards are borne by the merchant, through processing costs, which amounts to almost $500 billion.

American Express depends on such merchant fees to increase its revenue. However, it charges a higher fee in comparison to its rival credit cards companies such as MasterCard Inc and Visa Inc.

American Express says that this extra charge helps to meet additional benefits that are meted out to cardholders, as they provide more benefits than others.

Retailers, who pay more to American Express, encourage cardholders to use other credit cards at the point of sale to avoid this high charge from American Express.

With the court ruling, the shares of American Express saw a bounce upwards by 1% in the latter half of the day, while its competitors MasterCard Inc and Visa Inc, saw a fall of 3.8% and 3.6% on the legal decision made

Deborah White, from the Retail Industry Leaders Association, has stated that the court decision is a great loss for the consumers of America as competition has been hampered in the credit card sector.

However, American Express CEO, Stephen Squeri, has said that such a ruling has brought in fair market competition, consumer choice and will encourage services to the consumer

Sasha Farrell

Sasha Farrell is a privileged and versatile content writer and editor in the domains of Pharma, Health, and Medical. Before getting into the writing world, Sasha was working as an STM editor for few renowned authors and publications, which gave head-start to rifle through the Pharma, Health, and Medical Innovations.

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