The FINANCIAL -- American Express has agreed to settle two putative antitrust class actions filed by U.S. merchants that challenged the company’s Card acceptance agreements, according to American Express Company.
The settlement agreement will address certain merchant
concerns, while helping to ensure that American Express Card Members are
treated fairly at the point of sale. It will also limit the Company’s
exposure to future legal claims, according to American Express Company.
The first lawsuit, In re American Express Anti-Steering Rules Antitrust Litigation, challenges the Non-Discrimination Provisions in the company’s merchant contracts. The lawsuit dates back to 2006 and is pending in the U.S. District Court for the Eastern District of New York. The second lawsuit, In re Marcus Corporation, challenges American Express’ Honor All Cards Provisions. This lawsuit dates back to 2004 and is pending in the U.S. District Court for the Southern District of New York.
The company’s card acceptance agreements will continue to require merchants to honor all American Express cards with the exception of U.S. issued traditional debit cards, should the company or its affiliates or partners decide to issue them at a future date. The agreements will also continue to prohibit merchants from steering customers away from using American Express cards to competing products.
The changes to the Non-Discrimination and Honor All Cards Provisions will take effect after the resolution of any appeals to the final approval of the settlement, unless voluntarily implemented by American Express at an earlier date.
If the settlement terms are approved by the Court, all merchants who accept American Express cards in the United States will be bound by the changes to American Express’ Non-Discrimination and Honor All Cards Provisions and by the agreement not to make any future claims relating to these contract provisions for a period of at least 10 years after the changes are implemented.
American Express will reimburse the class plaintiffs’ costs of notifying merchants of the settlement up to $2 million and will provide an additional $2 million fund for plaintiffs to communicate to merchants about the terms of the settlement, according to American Express Company.