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 The settlement resolves two class actions filed by merchants that
have been pending for several years.
In court papers filed on Thursday, lawyers for the merchants wrote
that the settlement represents "some of the most consequential
relief ever obtained in a private enforcement action under the U.S.
antitrust laws."
Businesses have long complained about the rising costs associated
with accepting credit and charge cards that help pay for cardholder
rewards.
"The old rules forced consumers using cash, debit and even
electronic benefits cards to subsidize the high swipe fees that
credit card companies charge to pay for rewards," Gary Friedman, an
attorney for merchants, said in a statement.
The ability to surcharge transactions paid by those cards will give
merchants more power to control those costs by encouraging consumers
to use cheaper forms of payment, like debit cards, Friedman said.
American Express managing counsel Tim Heine suggested that some
merchants would not take advantage of the ability to surcharge.
"While the modification of our contract provisions gives merchants
some additional flexibility, many merchants continue to believe, as
we do, that surcharging is fundamentally anti-consumer," Heine said
in a statement. "Few merchants have taken advantage of earlier
opportunities to surcharge out of concern that it could risk
alienating customers, and drive them to patronize competitors who do
not surcharge."
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As part of the legal settlement, which must receive court approval,
American Express said it had agreed to pay up to $75 million in
attorneys' fees for both cases.
The agreement comes after a federal district court judge in Brooklyn
last week approved an estimated $5.7 billion class action settlement
brought by merchants against Visa Inc<V.N> and MasterCard Inc<MA.N>
challenging their rules.
As part of that settlement, merchants also won the right to
surcharge customers who use MasterCard and Visa credit cards in
certain circumstances.
(Editing by Eric Walsh)
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