Stay current on the latest developments from agencies including the CFPB, Federal Reserve, FDIC, and OCC to advise clients on real-life regulatory situations.
By Liz Crampton
The Justice Department on June 2 declined to ask the U.S. Supreme Court to review its antitrust case against American Express Co.
The decision means that, for now, American Express can continue its practice of asking merchants not to direct customers to lower-priced credit cards.
The DOJ’s decision to abandon the case doesn’t preclude the 18 states that signed onto the government’s suit from asking for high court review. But American Express said in a statement the DOJ’s decision not to pursue the case “sends a strong signal” that the litigation should end. The states have until midnight June 2 to file a request.
Without a Supreme Court review, key questions about a relatively new legal theory remain unanswered. John Briggs, an antitrust partner at the Washington law firm Axinn, Veltrop and Hartrider, said he was surprised by the DOJ’s decision. “This is a case that was crying out for a Supreme Court decision,” he told Bloomberg BNA.
The antitrust legal community wants clarification on whether enforcers need to separately analyze both sides of a two-sided market where a company receives revenues from separate groups. American Express receives revenue from both card holders and merchants.
“This is the first two-sided market case in the history of law,” Briggs said. “I don’t see another two-sided market case coming along soon. Kicking the can down the road just leaves us where we are here.”
The DOJ didn’t challenge an appellate court ruling that the government improperly analyzed the credit-card market in bringing the lawsuit. The U.S. Court of Appeals for the Second Circuit’s decision also dealt blow to the DOJ’s long record of wins. The court said the Justice Department should have considered how both merchants and consumers are affected by AmEx’s rules. The case began in 2010 when the government accused American Express of illegally imposing rules on merchants keeping them from steering customers to lower priced options.
The government ran up to the deadline to file for Supreme Court review after exhausting all available extensions. Staff had twice requested more time to file a writ of certiorari to allow new leadership to get in place. Makan Delrahim, nominee to lead the antitrust division, is still awaiting Senate confirmation.
Briggs noted that Visa Inc. and Mastercard Inc. settled similar charges in 2015. “I would think that a Justice Department neutral on competition would like to get a Supreme Court ruling,” he said.
To contact the reporter on this story: Liz Crampton in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Fawn Johnson at email@example.com
The text of the Second Circuit decision is at http://src.bna.com/pmB
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)