BROOKLYN (CN) - American Express is the lone holdout in an antitrust complaint brought by the federal government and seven states, accusing AmEx, MasterCard and Visa of raking in more than $35 billion a year in "merchant discount fees" from businesses that accept their cards. Visa and MasterCard settled by agreeing to let merchants offer discounts to customers who use less expensive credit or debit cards. Only American Express vowed to fight.
The proposed settlements with Visa and MasterCard are subject to court approval.
American Express has not filed a response to the lawsuit, but The Associated Press reported that the company will take the fight to court.
Connecticut, Iowa, Maryland, Michigan, Missouri, Ohio and Texas joined the United States as plaintiffs in the federal antitrust complaint.
The complaint states: "Defendants operate the three largest credit and charge card transaction networks in the United States. In 2009, a substantial amount of interstate commerce - over $1.6 trillion in transaction volume - flowed through Defendants' networks. Every time a consumer uses one of defendants' credit or charge cards to pay for a purchase from a merchant, the merchant must pay a fee, often called a 'card acceptance fee,' 'merchant discount fee,' or 'swipe fee.' In 2009 alone, defendants and their affiliated banks collected more than $35 billion in such fees from U.S. merchants. Defendants' fees are a significant cost for merchants that accept defendants' cards, and merchants pass these costs on to all consumers through higher retail prices."
It's customary for the credit-card giants to prohibit merchants from using a competitor's credit card, with lower merchant fees.
"Merchants cannot reward their customers based on the customer's card choice," the complaint states. "Merchants cannot even suggest that their customers use a less costly alternative card by posting a sign stating 'we prefer' another card or by disclosing a card's acceptance fee. In short, defendants' merchant restraints prohibit merchants from fostering competition among credit card networks at the point of sale."
"We will not tolerate anticompetitive practices," Attorney General Eric Holder said in a statement. "We want to put more money in consumers' pockets, and by eliminating credit card companies' anticompetitive rules, we will accomplish that."
Under the proposed settlement, merchants will be able to offer discounts, incentives and rebates for customers that use cards with lower swipe fees immediately, if they accept Visa and MasterCard, the Justice Department said.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.