WASHINGTON (AP) — The Supreme Court handed American Express a win Monday in a lawsuit over rules it imposes on merchants who accept its cards.
Under their contracts, merchants who accept American Express generally can’t encourage customers to use other credit cards. That’s even though Visa and MasterCard generally charge merchants lower fees. But American Express prevents merchants who accept its card from offering customers discounts or other incentives to use other cards or expressing a preference for other cards. The federal government and a group of states sued over American Express’ so-called anti-steering provisions, arguing that they violate federal law.

On Monday the high court ruled 5-4 in favor of American Express, allowing it to continue to bar merchants from steering customers to cards with lower fees.
“In this case, we must decide whether Amex’s antisteering provisions violate federal antitrust law. We conclude they do not,” Justice Clarence Thomas wrote in an opinion for himself and his conservative colleagues, Chief Justice John Roberts and Justices Anthony Kennedy, Samuel Alito and Neil Gorsuch. Thomas said “Amex’s business model has spurred robust interbrand competition and increased the quality and quantity of credit-card transactions.”
American Express cheered the ruling in a brief statement after it was announced.
“The Supreme Court’s decision is a major victory for consumers and for American Express. It will help to promote competition and innovation in the payments industry,” the statement said.
Justice Stephen Breyer, who used to teach antitrust law at Harvard University, wrote a dissenting opinion for himself and three liberal colleagues, Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan. Breyer, who took the unusual step of reading a summary of his dissent from the bench, said the court’s decision was “contrary to basic principles of antitrust law.”
The retail industry also expressed displeasure with the ruling. “Today’s ruling is a blow to competition and transparency in the credit card market,” National Retail Federation general counsel Stephanie Martz said in a statement. “The American Express rules in question have amounted to a gag order on retailers’ ability to educate their customers on how high swipe fees drive up the price of merchandise.”