Using its market power, the company’s non-discrimination provisions denied merchants the opportunity to influence their customers' payment decisions and thus shift spending to cheaper cards. In comparison, the American Express is the world's largest card issuer by purchase volume.
Additional Legal Topics that Apply to the Company
Unfair Trading
The unfair trading regulations protect consumers from unfair commercial activities by companies. The Act has banned any misleading or aggressive practices that are likely to harm the interests of the average consumer. Companies, such as American Express should not benefit unfairly from consumers by preventing fair competition. Therefore, by encouraging merchants to not promote competitors’ products and
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Unfair competition involves causing confusion among consumers to buy into one’s unfair trade practices. In the American Express’s case, the court found that the company’s restraints had an actual anticompetitive effect on inter-brand competition. Further, American Express allowed merchants to steer customers to more expensive cards and debit cards rather than the ones that cost them less money on a transaction-by-transaction basis.
However, unfair competition does not entail the economic harms involving monopolies and antitrust legislation since the act varies with the context of the business, the action being examined, as well as the facts of the individual case. The anticompetitive effects of the company stemmed from the fact that American Express’s non-discrimination provisions led to actual anticompetitive effects on inter-brand competition. By preventing merchants from steering additional charge volume to their least expensive network, for example, the non-discrimination provisions short‐circuit the ordinary price‐setting mechanism in the network services market by removing the competitive reward for companies offering merchants a lower price for acceptance