American Express 17.5M Settlement Over Anti-Steering Rules That Raised Illinois Prices

American Express has long charged merchants higher “swipe” (card acceptance) fees than rival networks, and it historically reinforced that pricing by using “anti-steering” (or non-discrimination) rules in its merchant contracts—terms that restricted retailers from nudging customers toward cheaper payment options. The lawsuit focuses on the ripple effect of those rules in Illinois from 2016 to 2022: if stores couldn’t encourage a Visa, Mastercard, or Discover purchase instead of a higher-cost Amex transaction, the plaintiffs argued merchants would often respond by raising shelf prices generally to cover acceptance costs, meaning everyone could pay more at the register even if they never used (or even had) an Amex card. The case was filed as a consumer class action alleging that this dynamic violated the Illinois Consumer Fraud and Deceptive Business Practices Act by effectively inflating prices for certain shoppers. After a jury trial, American Express was found liable under Illinois consumer-protection law (even though antitrust claims under federal law and several other states’ laws were not successful), and damages were awarded; the parties then reached a $17.5 million settlement before final judgment, creating a claims fund for a narrow group: Illinois residents who used basic non-rewards Visa/Mastercard/Discover credit cards at specified major retailers and did not hold an Amex card during the period. The significance is less about any single receipt and more about the idea that payment-network contract terms can translate into broad, hard-to-see price effects—and that state consumer-protection statutes may succeed where federal antitrust theories don’t. More broadly, the dispute sits in the ongoing policy fight over card-network rules, merchant pricing freedom (discounts or surcharges), and how transparent payment costs should be to consumers—an area shaped by card-network operating rules, state consumer laws, and, at the federal level, prior litigation over Amex’s anti-steering provisions (including the Supreme Court’s 2018 Ohio v. American Express decision that made certain federal antitrust challenges harder). Similar cases often split along these lines: merchants sue over interchange/acceptance fees, while consumers argue that restrictions on steering or differential pricing can raise retail prices across the board; this settlement underscores that even when a nationwide antitrust theory falters, targeted state-law claims can still create meaningful exposure for payment networks and potentially influence how card rules are drafted and enforced going forward