An antitrust class action settlement against American Express was denied final approval by a U.S. District Court judge this month after a lawyer in the case shared confidential information with another attorney, who represented MasterCard in a similar proceeding.
As a result, Attorney Gary Friedman and his co-counsel in the Amex case will no longer be able to collect the proposed $79 million, “which they were slated to receive for a settlement that permits merchants to impose a surcharge on customers who use Amex credit cards, as long as those retailers impose the same surcharge on customers who use other credit cards,” according to an Aug. 4 article from Reuters. The judge’s decision also jeopardizes a comparable agreement with Visa and MasterCard.
A statement issued from American Express on its website says:
“We are disappointed in the court's decision to deny final approval to the settlement. We continue to believe the agreement is fair to merchants, providing them with additional flexibility while ensuring our card members are treated fairly at the point of sale. We believe we have strong defenses against the merchants' claims, and will continue to fight our case in court.”
Interchange fees—also referred to as swipe fees—are charged to a merchant when a credit card is used as payment. These fees typically range between 1-3% of the total transaction and are set by companies like Visa and MasterCard.
- Jennifer Lehman, NACM marketing and communications associate
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