Below is the first part of an article by Zachs Equity Research from Zachs.com. It reads…
Shares of American Express Co. (AXP –Analyst Report) or AmEx rose 2.2% in the last two trading sessions, following the announcement of the settlement of its two significant antitrust class action litigations with merchants in the U.S. involving card transaction fees. The settlement apparently partly mitigates financial risk for the company and helps retain market confidence in the stock.
One of the lawsuits was filed in 2006, while the other one dates back to 2004. Both the lawsuits alleged that AmEx manipulated the company policies in a way that prohibited the merchants from promoting the use of cheaper cards with lower processing fees.
Higher processing fees and promotion of higher-charged cards by such card giants have burdened merchants, consumers and the government in the past. Each time consumers swipe their credit card, the merchant is bound to pay a fee.
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