WASHINGTON — American Express did not violate the antitrust laws by insisting in its contracts with merchants that they do nothing to encourage patrons to use other cards, the Supreme Court ruled on Monday.
The decision has implications not only for what one brief called “an astronomical number of retail transactions” but also for other kinds of markets, notably ones on the internet, in which services link consumers and businesses.
Such “two-sided platforms,” the court said, require special and seemingly more forgiving antitrust scrutiny.
The vote was 5 to 4, with the court’s more conservative members in the majority. Justice Clarence Thomas, writing for the majority, said the specialized nature of credit-card transactions justified what in other circumstances might have been anti-competitive conduct.
Retailers pay so-called swipe fees when customers use credit cards. American Express charges higher fees than Visa or Mastercard, meaning that merchants have good reason to prefer those other cards.
But credit card networks create “two-sided platforms,” Justice Thomas wrote, and they “differ from traditional markets in important ways.” Since card companies deal with both merchants and consumers, he wrote, people challenging actions as anticompetitive must take account of the effect on both sets of market participants.
Viewed that way, Justice Thomas wrote, American Express promoted competition by designing rewards programs to attract affluent customers.
“Amex’s business model sometimes causes friction with merchants,” he wrote. “To maintain the loyalty of its cardholders, Amex must continually invest in its rewards program. But, to fund those investments, Amex must charge merchants higher fees than its rivals.”
“Even though Amex’s investments benefit merchants by encouraging cardholders to spend more money, merchants would prefer not to pay the higher fees,” Justice Thomas wrote. “One way that merchants try to avoid them, while still enticing Amex’s cardholders to shop at their stores, is by dissuading cardholders from using Amex at the point of sale.”
The steering agreements were justified in these circumstances, Justice Thomas wrote.
“While these agreements have been in place,” Justice Thomas wrote, “the credit-card market experienced expanding output and improved quality. Amex’s business model spurred Visa and Mastercard to offer new premium card categories with higher rewards. And it has increased the availability of card services, including free banking and card-payment services for low-income customers who otherwise would not be served.”
Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Samuel A. Alito Jr. and Neil M. Gorsuch joined the majority opinion.
Justice Stephen G. Breyer read his dissent from the bench, a rare move indicating profound disagreement. He said the implications of the ruling were vast and could hurt competition in many realms.
“I particularly fear the interpretive impact of the majority’s discussion of what it calls ‘two-sided platforms,’ in an era when that term might be thought to apply to many internet-related goods and services that are becoming ever more important,” Justice Breyer said.
Merchants expressed disappointment with the decision.
“Today’s ruling is a blow to competition and transparency in the credit card market,” said Stephanie Martz of the National Retail Federation. “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.”
American Express issued a statement saying the long court battle was “well worth the fight because important issues were at stake: consumer choice, fair market competition, and the ability to deliver innovative products and services to our customers, both consumers and merchants.”
In 2010, the Justice Department and 17 states sued several credit card companies, saying that their steering practices had violated the antitrust laws. Visa and Mastercard settled, but American Express fought the case.
In 2015, Judge Nicholas G. Garaufis of the United States District Court in Brooklyn ruled that contracts forbidding merchants to steer customers toward other forms of payment were an unlawful restraint of trade.
The United States Court of Appeals for the Second Circuit, in New York, disagreed, ruling that Judge Garaufis had unduly focused on merchants’ interests “while discounting the interests of cardholders.”
“This approach does not advance overall consumer satisfaction,” Judge Richard C. Wesley wrote for a unanimous three-judge panel. “Though merchants may desire lower fees, those fees are necessary to maintaining cardholder satisfaction — and if a particular merchant finds that the cost of Amex fees outweighs the benefit it gains by accepting Amex cards, then the merchant can choose to not accept Amex cards.”
Eleven states asked the Supreme Court to hear the case, Ohio v. American Express, No. 16-1454, saying that the appeals court’s decision was at odds with established antitrust principles and affected “an astronomical number of retail transactions in the United States.”
The Supreme Court affirmed the appeals court’s decision.
In dissent, Justice Breyer faulted every part of the majority’s analysis. He said that the way American Express deals with merchants should be considered in isolation and that its contracts were anti-competitive.
He added that two-sided transactions were commonplace.
“Consider a farmers’ market,” Justice Breyer wrote. “It brings local farmers and local shoppers together, and transactions will occur only if a farmer and a shopper simultaneously agree to engage in one.”
“What about travel agents that connect airlines and passengers?” he asked. “What about internet retailers, who, in addition to selling their own goods, allow (for a fee) other goods-producers to sell over their networks?”
“Nothing in antitrust law, to my knowledge, suggests that a court, when presented with an agreement that restricts competition in any one of the markets my examples suggest, should abandon traditional market-definition approaches and include in the relevant market services that are complements, not substitutes, of the restrained good,” Justice Breyer wrote.
Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan joined the dissent.
American Express, Justice Breyer concluded, had other ways to achieve its goals.
“If American Express’ merchant fees are so high that merchants successfully induce their customers to use other cards, American Express can remedy that problem by lowering those fees or by spending more on cardholder rewards so that cardholders decline such requests,” Justice Breyer wrote. “What it may not do is demand contractual protection from price competition.”
Keywords clouds text link http://alonhatro.com/
|aviatorsgame.com ban nhạc||confirmationbiased.com|
|mariankihogo.com ốp lưng||Giường ngủ triệu gia Ku bet ku casino|
mặt nạ mặt nạ ngủ Mặt nạ môi mặt nạ bùn mặt nạ kem mặt nạ bột mặt nạ tẩy tế bào chết mặt nạ đất sét mặt nạ giấy mặt nạ dưỡng mặt nạ đắp mặt mặt nạ trị mụn
mặt nạ tế bào gốc mặt nạ trị nám tem chống giả
© 2020 US News. All Rights Reserved.