The court stated that the government had failed to show that the high swipe fees impacted customers along with merchants, while also ruling that Amex’s model had increased the quality of credit card transactions. In total, swipe fees bring in over $50 billion to credit card companies, which help run the rewards program.
Amex believes the decision will benefit competition and innovation in the payments sector
Those in support of retailers said the court decision was likely to harm competition and expose customers to high fees and costs. Amex is celebrating the decision, which it believes will benefit competition and innovation in the payments sector.
Another interesting point is that this decision is likely to spill over to other industries where companies serve two parties i.e. the customer and the third-party vendors providing products and services, or in the case of tech companies, advertisers. Companies like Amazon (AMZN), Google (GOOGL) and Facebook (FB) will be able to shield themselves from legal action unless it can be proved that both sides of the market will be affected by their actions. In such a scenario, it will be difficult for smaller firms and customers to raise concerns.
Amex, which accounts for over a quarter of all credit card transactions in the US, reported a 32% increase in global merchant services income for the first quarter of 2018 compared to last year. If Amex had lost the case, it would have impacted its credit card rewards program. However, despite all this, there are experts who believe this decision is not likely to cause much of a problem for customers and that it remains restricted between American Express and its vendors.