When the government recently filed an antitrust suit against the three biggest credit card companies, it said that it only wanted to give their customers more options. But for the American Express Company, the suit directly attacks its unique business model. That’s why Amex is fighting the government, even as Visa Inc. and MasterCard Incorporated have settled.
The U.S. Department of Justice filed suit in federal district court in Brooklyn on October 4. It accused the card issuers of prohibiting merchants from offering customers other, and sometimes cheaper, ways to pay a bill, such as a discount for paying cash. The same day, prosecutors also announced that they had reached a settlement with Visa and MasterCard that must still be approved by the court. The two companies agreed to modify their policies so that merchants can “steer” customers to other payment options.
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