American Express card rules violate US antitrust law: judge

New York

AMERICAN Express Co violated US antitrust law by prohibiting merchants from steering consumers to use lower-cost credit cards, a federal judge ruled last week, in the company's second major setback in February.

The decision by US District Judge Nicholas Garaufis in Brooklyn followed American Express's loss on Feb 12 of a lucrative, exclusive partnership with warehouse retailer Costco Wholesale Corp.

It is also a victory for the US government and 17 states, which in 2010 sued American Express over allegations it forbade merchants from recommending to consumers which cards to use.

The New York-based company's activities "imposed actual, concrete harms on competition in the credit and charge card net…