The Retail Litigation Center is once again calling out American Express Co. for its "anti-steering rules" and is asking the U.S. Supreme Court to overturn an appeal of a lower court decision that allows the credit card company's current practices to stay on the books.
In its July 7 amicus brief in the State of Ohio v. American Express, the retail advocacy group asked the Supreme Court to review and reinstate a New York federal district court's injunction "and the hope it offered of subjecting credit card processing fees to competition." The decision, in which the lower court found Amex's rules to be anticompetitive, was reversed by a January judgment from the U.S. Court of Appeals for the Second Circuit.
"We're asking the Supreme Court to grant certiorari ... It's always a long shot but we want to make sure the Supreme Court can be aware of all of the implications [of Amex's rules]," said Deborah White, general counsel of the Retail Industry Leaders Association and president of its legal arm, the Retail Litigation Center.
American Express has rules in place with its merchants that prevent the retailers from offering discounts for customers using certain credit cards. Visa and Mastercard previously agreed to remove a similar set of rules they have, but with Amex's practices still in effect, White said that none of the other credit card companies can stand to benefit.
The 30-page amicus brief filed by the Retail Litigation Center highlights theoretical scenarios where in a competitive market, a retailer like Best Buy could offer a designated checkout lane for Discover customers, or Wal-Mart could offer prescription discounts for certain types of cardholders. The way Amex's rules are written now, the Retail Litigation Center claims, that isn't possible.
"The rules here not only insulate Amex from competition, but effectively suppress competition among all credit card companies," said the brief, which was drafted by Debbie Greenberger, a litigator with Emery Celli Brinckerhoff & Abady.
There is an argument that retailers could drop Amex altogether but "that isn't realistic," White said, because Amex holds the majority of the market. According to the RLC, 90 percent of retailers currently accept Amex payments.
A spokeswoman for American Express did not respond to emails requesting comment. On its website, in response to a U.S. Department of Justice lawsuit accusing the company of violating antitrust laws, the company listed reasons why it does not.