American Express is defending its high interchange fees in court against claims by the US Department of Justice that those fees harm competition, according to reports.
AmEx president of the company’s US consumer services business Joshua Silverman testified in court this week to defend those high fees, arguing that they are crucial to the credit card company’s unique rewards program, which gives AmEx its competitive edge over rivals.
Being forced to lower those fees “would be disastrous, and we would have to rethink everything in our business model,” Silverman told US District Judge Nicholas Garaufis on Monday.
But the DOJ claims that those fees harm competition because they impose unfair rules on merchants that block those merchants from encouraging customers to use credit cards with lower swipe fees like Visa and MasterCard.
But American Express says that its top rivals Visa and MasterCard are too big to be harmed by AmEx’s merchant agreements. According to the company, Visa and MasterCard hold a combined 1 billion cards in the country; AmEx, in comparison, has about 55 million.
According to reports, the DOJ’s suit against AmEx is the first time a credit card company has faced trial on allegations that swipe-fee rules violate antitrust law.
Full content: Bloomberg
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
EU Conducts First-Ever Raids on a Company Under Foreign Subsidies Regulation
Apr 23, 2024 by
CPI
FTC Moves to Ban Non-Compete Agreements, Aiming to Boost Labor Mobility
Apr 23, 2024 by
CPI
Federal Judge Nods at $418M Deal in Real Estate Antitrust Suit
Apr 23, 2024 by
CPI
Mexican Watchdog Probes Amazon and Mercado Libre Over Loyalty Bundles
Apr 23, 2024 by
CPI
Competition Commission of India to Probe AI Landscape for Competition
Apr 23, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI