Antitrust Loss Forces Change in AmEx Policy

Merchants who accept AmEx cards are no longer banned from steering customers to Visa and MasterCard.
Katie Kuehner-HebertJune 19, 2015

On the heels of a legal setback in an antitrust case, American Express is lifting restrictions that prevent merchants who accept its cards from steering customers to lower-cost competitors, The Wall Street Journal reports.

An appeals court earlier this week had denied AmEx’s request for a stay of an injunction requiring it to change its policy on customer steering. In imposing the injunction, a trial judge found the policy was anti-competitive.

Starting in July, merchants will be able to offer discounts or rebates to customers paying with a Visa or MasterCard, or display signs showing which card brand they prefer.

AmEx said it will remove its restrictions pending the outcome of its appeal of the injunction. “Steering is not a good thing for consumers and we believe many merchants agree,” the company said in a statement.

Visa and MasterCard are now free to negotiate lower fees with certain merchants in exchange for the merchant agreeing to steer customers toward their cards.

“These fees are a part of doing business, but you’d be silly not to consider all of your options,” Evan Johnson, a seafood restaurant owner in Clinton, Conn., told the WSJ. The eatery still has a 1990s-era “We prefer Visa” sticker posted near its front door.

MasterCard’s president of North America Chris McWilton said his company is planning to take advantage of AmEx’s move, though he declined to be specific.

“These are all things we have been thinking about for some time because we saw this coming down the pike,” McWilton told the WSJ.