Supreme Court Ok’s Amex Anti-Steering Rules

The Supreme Court on Monday ruled that American Express can continue its anti-steering policy that bars its merchants from telling customers they prefer one credit card brand over another. The lawsuit was originally brought by the Justice Department and 17 states in 2010, which argued that Amex's merchant rules deter competition and result in higher fees for consumers.

In the majority's opinion, Justice Clarence Thomas wrote that "there is nothing inherently anticompetitive about the provisions. They actually stem negative externalities in the credit-card market and promote inter-brand competition. And they do not prevent competing credit-card networks from offering lower merchant fees or promoting their broader merchant acceptance."

A U.S. District Court in 2015 ruled against Amex, though the company won its appeal in 2016; a group of states, led by Ohio, challenged the appeals court's decision.

Amex argued that most of its card members also hold competing cards and the vast majority of card holders do not carry Amex cards, so allowing merchants to steer customers to another card will only drive service toward the more dominant networks such as Visa and Mastercard.

The Justice Department had also brought a similar suit against Visa and Mastercard, but those companies negotiated their own settlement with the government.