retail news in context, analysis with attitude

The New York Times reports that Judge Nicholas G. Garaufis of Federal District Court for the Eastern District of New York has ruled that "a longstanding practice by American Express aimed at keeping customers from using other forms of payment violates United States antitrust laws."

While American Express fees generally are higher than those for competitive cards, the company has had a longstanding rule saying that merchants taking Amex cannot encourage customers to use a competitive card with lower fees.

According to the story, "Amex released a statement saying it was 'disappointed' with the ruling and would appeal. The company said the disputed rules for merchants actually increase competition rather than stifle it by protecting Amex cardholders 'from anti-consumer practices, including at the checkout counter, such as being told to pay with another card'."

While the judge has ruled against the American Express practice, he said he would "determine a remedy" at a future date.
KC's View:
Been a bad week for Amex ... it starts by Costco saying that sometime next year it will stop taking Amex, which which it has had an exclusive arrangement for years, and ends with a judge slapping the company down for "restraint of trade."

While Amex seems to be guilty here, I don't think it is alone - the whole banking/credit card/debit card structure seems utterly rigged against the consumer. So why should Amex's approach be any different?