A US government lawyer accused American Express (AmEx) of hindering price competition in the US credit card market and preventing merchants and consumers from reaping cost savings on the first day of the antitrust lawsuit filed by the Justice Department and 17 states.
Rules imposed by AmEx on merchants accepting its cards are at the centre of the trial, which seeks to prevent them from offering incentives to customers to use less-expensive credit cards while shopping.
As cited in Reuters, Craig Conrath, an attorney for the Justice Department, said, "Amex doesn’t want consumers to have simple, truthful information about how much their cards cost."
The lawsuit is seeking an order to allow merchants that accept AmEx to give consumers incentives to use less-expensive credit cards.
AmEx, meanwhile, has refuted these charges, with its attorney Evan Chesler saying that the government case is an "assault on Amex’s business model, a model that has in fact driven competition to the enormous benefit of merchants and consumers for a number of years."
Along with AmEx, the Justice Department and states also sued Visa and MasterCard, with the latter two settling the case on the same day it was filed.
Every year, credit card companies charge merchants more than $50bn to process consumer transactions.