AmEx Sued by Pharmacies on Antitrust

     BROOKLYN (CN) – Rite Aid, Walgreen and CVS Pharmacy claim American Express illegally prohibits merchants who accept AmEx credit cards from offering any promotions, discounts or incentives that would steer customers toward other credit cards that cost merchants less money.

     In separate federal antitrust complaints, the pharmacies claim this increases costs for all consumers.
     Rite Aid claims that AmEx’s “anti-steering rules” prohibit contractees from “doing anything that would lead – or ‘steer’ – a retail purchaser to use a payment card product that costs the merchant less to accept than an AmEx card,” and that the contract prohibited merchants from “‘criticizing’ the AmEx card or services.”
     It claims that “The purpose and effect of these anti-steering rules was to … prevent merchants from truthfully informing retail customers that their use of an AmEx payment card imposes higher costs on the merchant than other payment card products or payment methods and that those higher costs result in higher retail prices to consumers.”
     Rite Aid claims AmEx’s rules illegally restrict competition and elevate prices, and that merchants were forced to raise prices to all consumers, even those who do not use AmEx cards, because of the higher cost of doing business. And it claims AmEx did all that to maintain monopoly power in restraint of trade.
     Rite Aid demands treble damages. Its lead counsel is Zachary Davis with Hangley Aronchick Segal & Pudlin.
     Walgreen is represented by Douglas Patton with Kenny Nachwalter of Miami, CVS by Robert Kaplan with Kaplan Fox & Kilsheimer of New York, N.Y.

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