On January 29, 2019, Berman Tabacco filed this antitrust action alleging damages, restitution, and injunctive relief against the American Express Company and American Express Travel Related Services Company, Inc. (collectively, “Amex”). This action is brought on behalf of the millions of persons and entities that used an electronic form of payment other than an Amex charge or credit card to purchase goods and services sold by merchants across the country at prices allegedly inflated by Amex’s non-discrimination provisions. The case alleges that this conduct unreasonably restrained trade by increasing credit card transaction prices (i) resulting in fewer credit card transactions than would occur but-for Amex’s practices and (ii) raising consumer retail prices on goods and services purchased throughout the country. The class action seeks injunctive relief and damages from Amex for its continued imposition of anti-steering rules in all of its contracts with merchants. In the United States, Amex charges fees to merchants of 2 to 3 percent of the purchase price whenever a consumer uses an Amex card. Amex’s anti-steering rules in merchant contracts prohibit the merchant from disclosing that fact or steering consumers to cheaper payment options such as debit cards or cheaper credit cards (for the merchant) such as Visa or Mastercard. In Europe, regulations of “swipe fees” limit Amex and other credit cards’ swipe fees to one-seventh of the amounts charged in the U.S. The U.S. Department of Justice (“DOJ”) tried, and won, an antitrust action against Amex in 2015. However, the U.S. Supreme Court ultimately undid that trial result and handed Amex a victory. In a landmark ruling, the Supreme Court decided that the DOJ and the trial court incorrectly defined the relevant market, with the Supreme Court, for the first time, deciding what legal standards apply to a “two-sided” market—here, the market for credit card transactions. This action is important because it is the first to seek redress for consumers under antitrust laws and the new “two-sided market” legal standards. If successful, the class action will put an end to Amex’s anti-steering rules to permit price competition to flourish between rival credit card networks, and will recover hundreds of millions of dollars in overcharges to consumers for everything from airline tickets to groceries, the prices of which have been inflated as merchants pass-on inflated swipe fees in the form of higher retail prices, as suggested during the 2015 trial.
