(COLUMBUS, Ohio) -- Ohio Attorney General Mike DeWine today announced that a federal judge has ruled in favor of Ohio, the U.S. Department of Justice, and 16 other states in finding that American Express Co.’s anti-steering rules – which prevented merchants from offering discounts to consumers who used certain brands of credit cards over others – violated federal antitrust laws.
Ohio was the lead state in the litigation.
The case involved fees that merchants have to pay credit card companies when they accept credit card payments from consumers.
For years, the major credit companies prohibited merchants from telling consumers about those fees and from offering discounts to consumers who used certain (cheaper-for-the-merchant) credit card brands over others.
In today’s decision, a federal judge has ruled that the restrictions American Express placed on merchants violated antitrust laws, reducing competition among credit card companies and leading to higher prices for merchants and in turn for consumers. The judge also ruled that increased competition among credit card companies would lead to lower prices for merchants, allowing merchants to pass on those savings to consumers through lower prices.
“This ruling is a victory for merchants and for consumers,” Attorney General DeWine said. “U.S. merchants pay over $40 billion dollars a year to accept credit cards. They should have greater flexibility and control over their credit card transactions and the ability to pass on savings to their customers.”
Today’s decision, filed in the U.S. District Court for the Eastern District of New York, also means that agreements the states and the U.S. Department of Justice reached previously with MasterCard and Visa can be fully implemented pending the conclusion of any appeals to today’s decision.
Visa and MasterCard settled similar antitrust charges in 2010, agreeing to remove or revise many of their anti-steering rules. The settlements require Visa and MasterCard to allow merchants to offer discounts, incentives, and information to consumers to encourage the use of payment methods that are less costly to merchants.
The states involved in the case include Arizona, Connecticut, Idaho, Illinois, Iowa, Maryland, Michigan, Missouri, Montana, Nebraska, New Hampshire, Ohio, Rhode Island, Tennessee, Texas, Utah, and Vermont.
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