American Express Sued by Antitrust Division for Unfair Merchant Rules

American Express Sued by Antitrust Division for Unfair Merchant Rules

www.dailyfinance.com

The Justice Department filed an antitrust lawsuit against American Express (AXP) Monday, alleging that the financial institution has been engaging in anti-competitive practices. In the same statement, the Justice Department said it reached a proposed settlement with Visa (V) and MasterCard (MA) over similar charges.

The credit card companies were charged with enforcing rules that prevented merchants from offering consumer discounts, rewards or information about card costs, the Justice Departm

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Choose the card that pays you back! On the surface of this all to rare Anti-Trust Case against all three major credit card companies, VISA, MasterCard and American Express, it appears to be all about angry merchants who feel at a disadvantage in what credit cards they can afford to accept, as merchants pay a percentage based fee to the credit card companies to convert your plastic transaction to cash in their bank accounts.

The big three though will often provide a further discount on their rate, and some free advertising placards and materials if a merchant agrees to not honor or promote the use of other cards at their business.

The Justice Department along with 7 of the States say this is a monopoly practice, and predatory to the smaller companies like Discover and Diners Club.

But is that the opportunistic Justice Departments real motive? This practice has been going on for decades unchallenged.

Are select states along with the Federal Government becoming so cash strapped because of falling tax bases that they are in essence targeting big dollar corporations for ‘hand outs’ to replenish coffers and treasuries.

Or are they trying to real in big banks and lenders after the Banksters looted the Federal Government Treasury through the Troubled Asset Relief Program under false threat of a financial collapse?

Or is it just time to be mid-term election posturing for candidates to point to something ‘positive’ being done in Washington to deal with America’s Debt crisis?

One thing is for sure American Express is not laying down for it, and is fighting it, while VISA and MASTERCARD seem to have settled out of hand quickly as a simple cost of doing business.

One thing is for sure, while few if any of us have any love for the banks, the truth is the fines will go to the government and the consumers using these financial products will eventually have the cost of that passed on to them.

I can think of some more troubling monopolies out there that are running amuck in the retail sector of the economy whose predatory practices are leading to the wholesale exportation of jobs.

To bad the Justice Department is not going after them!


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