WASHINGTON, D.C. – Yesterday the U.S. Supreme Court ruled in the case of Ohio v. American Express that the Justice Department and state attorneys general had not shown that American Express violated the Sherman Antitrust Act.
“The Supreme Court has given us a clarification of antitrust law as applied to American Express. Whether this approach will be applied to Visa and MasterCard remains to be seen, but whatever that decision is, merchants will be able to demonstrate that the major credit card networks have violated the antitrust laws. The actions of the card networks are so far-reaching and abusive of both merchants and consumers that merchants will not have difficulty showing that the card networks have violated the antitrust laws in multiple ways. We look forward to demonstrating those violations of law in court,” said NACS Senior Vice President of Government Relations Lyle Beckwith.
The case, which was brought by a collection of 17 state attorneys general and the Department of Justice in 2010, examined whether American Express rules that bar retailers from encouraging customers to use lower-fee payment methods violate antitrust law. The Supreme Court agreed to hear the case after the U.S. Court of Appeals for the Second Circuit overturned a February 2015 district court decision finding that the American Express rules constitute an illegal restraint on trade. NACS filed an amicus curiae brief with the Court as part of a coalition of retailer associations urging the Court to reverse the Second Circuit decision.
Ohio and several other state attorneys general asked the Supreme Court to decide the case. The Supreme Court’s 5-4 decision upheld the Circuit Court. Judgment will be issued in favor of American Express in the case.
Justice Stephen Breyer read part of his dissenting opinion from the bench and asserted that the Court’s decision was inconsistent with basic principles of antitrust law. And, Justice Breyer wrote that the Department of Justice and states proved that American Express used its market power in anticompetitive ways so the case was proven regardless of whether the Court were to apply the test it espoused in the case.
The decision, however, means that American Express can continue to enforce provisions of its contracts with merchants preventing merchants from discounting other payment cards and not American Express. It remains to be seen whether the reasoning in the case will be applied to other credit card networks such as Visa and MasterCard.