By Maria Aspan and Diane Bartz
WASHINGTON/NEW YORK (Reuters) – The U.S. Justice Department sued American Express Co, Visa Inc and MasterCard Inc on Monday, accusing them of violating antitrust laws and citing rules that prevented merchants from encouraging consumers to use cheaper credit cards.
Simultaneously, the Justice Department settled with Visa and MasterCard, which agreed to allow merchants to offer discounts to consumers who use less expensive types of credit or debit cards. The companies said the settlement, subject to court approval, did not involve any payment.
The lawsuit has the potential to cut into a significant source of profits for American Express and threatens to reshape the competitive landscape of the card processing business.
Shares of American Express, which charges merchants more on average for processing credit card transactions than its rivals, closed down 6.5 percent at $39.05.
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