Operations

Supreme Court upholds ban on steering credit card users

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A stab at allowing restaurants and other retailers to steer customers toward credit cards with lower merchant fees was shot down Friday by the U.S. Supreme Court.

The nation’s highest court ruled that American Express did not violate antitrust laws by prohibiting businesses accepting its card from encouraging patrons to use Mastercard, Visa or other credit cards. The ruling went against a challenge from Ohio and 10 other states. 

The states argued that American Express’ rule ultimately led to higher consumer prices because merchants passed along the higher fees they pay for accepting the charge card. In a 5-4 decision, the high court disagreed, saying the plaintiffs had not proven that AmEx’s ban artificially inflated prices. Instead, it noted that the charge card giant provides better benefits to card users, which makes a higher price reasonable and reflective of the market.

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