The Wall Street Journal: Judge orders American Express to revise merchant agreements

A federal judge ordered American Express Co. AXP, +0.38%   to let merchants steer customers to other forms of plastic payments, including debit cards.

The order implements a February ruling by U.S. District Judge Nicholas Garaufis that New York-based American Express violated antitrust laws by not permitting merchants to encourage customers to use cheaper cards. His ruling followed a bench trial last year.

American Express reiterated that it will appeal the decision, saying it will hurt competition.

“As we have previously stated, we plan to appeal the court’s ruling because we believe it will not provide any benefit to consumers and will in fact harm competition by further entrenching the two dominant networks,” the company said in a statement. It was referring to rival payment networks Visa Inc. V, -1.92%   and MasterCard Inc. MA, -0.04%  , which are larger than AmEx.

The decision gives merchants latitude to encourage customers to use cards other than those offered by AmEx by offering them discounts, rebates or other enticements. AmEx’s longstanding rules don’t permit merchants to steer to other forms of payment.

American Express shares were unchanged in after-hours trading, after rising 0.4% to $77.45 in regular trading.

Read an expanded version of this article at WSJ.com

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