A federal appeals court on Monday cleared the way for American Express to block merchants that accept its cards from steering customers toward lower-cost cards from other issuers.
The 2nd U.S. Circuit Court of Appeals in New York said a lower court judge in Brooklyn erred in February 2015 in finding that American Express' "anti-steering" rules violated federal antitrust law.
Underlying the case were the fees that merchants pay to process transactions, which the U.S. government estimated at more than $50 billion a year, and which can be passed along to cardholders in the form of higher prices.
The lower court judge, Nicholas Garaufis, had found that non-discrimination provisions (NDPs) in American Express' merchant agreements, meant to dissuade customers from using cards from Visa and MasterCard, unreasonably restrained competition.