American Express is set to face trial over claims made by the US government and 17 states that it prevents credit card providers from charging lower processing fees.
The government alleged that American Express not only prevents its millions of merchants from providing customers with incentives while making purchases, but also charges the highest processing fees on average amongst all card networks, reported Reuters.
As per the governments’ pre-trial statement, merchants wanted to use discounts and other methods to promote competition within the segment that would help them to negotiate lower fees.
Meanwhile, American Express claimed that they account for only 26% share in the market and such small share does not allow them to stop competition. It also stated that their practice protect customers from price discrimination and have helped promote competition.
Reacting to American Express, the US Justice Department said it can show that Amex’s behaviour had an adverse impact on competition, regardless of its market share.
The trial will begin on 7 July and could last for two to three months.