Amex Loses Appeal, Merchants' Antitrust Claims Stay in Federal Court
American Express has lost its appeal to force merchants to arbitrate their antitrust claims in court. The U.S. Court of Appeals for the First Circuit affirmed a lower court's decision denying American Express' request to stay the litigation and compel arbitration.
The dispute centers around American Express' anti-steering and non-discrimination provisions, which restrict merchants from encouraging customers to use cards with lower acceptance costs. Thousands of small businesses, including 5-Star General Store (also known as Bento LLC), claim these restrictions violate federal antitrust law.
American Express had initially prevailed in a 2013 Supreme Court case, American Express Co. v. Italian Colors Restaurant, which upheld the enforcement of an arbitration agreement despite merchants' concerns about individual recoveries.