American Express has announced that it has agreed to settle two antitrust class action lawsuits filed by U.S. merchants that challenged the company’s card acceptance agreements. The company says that "the settlement agreement will address certain merchant concerns, while helping to ensure that American Express Card Members are treated fairly at the point of sale. It will also limit the Company’s exposure to future legal claims."
Tim Heine, Managing Counsel of American Express, said:
We believe the terms of the settlement continue to balance the interests of Card Members and merchants.
“While the modification of our contract provisions gives merchants some additional flexibility, many merchants continue to believe, as we do, that surcharging is fundamentally anti-consumer. Few merchants have taken advantage of earlier opportunities to surcharge out of concern that it could risk alienating customers, and drive them to patronize competitors who do not surcharge.
"Merchants choose to accept American Express because we help them reach millions of customers who value the convenience, rewards, and world class service that our payment products provide. Unlike Visa and MasterCard, we do not have market power. We operate a competitive, dynamic business with a unique business model. Resolving these lawsuits will allow us to stay focused on helping merchants build their business and strengthen their customer relationships.”
The first lawsuit, In re American Express Anti-Steering Rules Antitrust Litigation, challenges the Non-Discrimination Provisions in the company’s merchant contracts. The second lawsuit, In re Marcus Corporation, challenges American Express’ Honor All Cards Provisions.
The changes to the Non-Discrimination and Honor All Cards Provisions will take effect after the resolution of any appeals to the final approval of the settlement, unless voluntarily implemented by American Express at an earlier date.
If the settlement terms are approved by the Court, all merchants who accept American Express cards in the United States will be bound by the changes to American Express’ Non-Discrimination and Honor All Cards Provisions and by the agreement not to make any future claims relating to these contract provisions for a period of at least 10 years after the changes are implemented.