(Adds statement from company)
By Andrew Longstreth
NEW YORK May 7 A lawsuit brought by the U.S.
Justice Department and several states against American Express
Co over the credit card rules the company imposed on
merchants can move forward to trial, a U.S. judge ruled on
The lawsuit, filed in 2010, charged that American Express'
rules prevent merchants from offering discounts and incentives
to consumers to use less expensive forms of payment.
U.S. District Judge Nicholas Garaufis of Brooklyn said that
"genuine issues of material fact remain in dispute," according
to his written ruling.
American Express said in a statement that it "continues to
believe that it has strong defenses to the DOJ lawsuit and will
defend the case vigorously."
Merchants spend more than $40 billion a year on networks
that let them accept credit cards from American Express and its
rivals, according to the government. On average, merchants spend
the most on accepting American Express cards, the government
The government contends that American Express's rules
prevent price competition among credit card companies.
In requesting that the case be dismissed, American Express
argued that the government could not show it had significant
But in his ruling, Garaufis concluded that the government
did not have to prove market power to make a successful
The government could alternatively show that American
Express' conduct had an "adverse effect on competition,"
The Justice Department also sued Visa Inc and
MasterCard Inc in 2010 over their rules, but both
companies settled immediately.
The case is United States of America, et al v. American
Express Co, U.S. District Court for the Eastern District of New
York, No. 10-04496.
(Reporting by Andrew Longstreth; Editing by Jan Paschal)