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New Markets and Financial Fraud Division Plays Major Role in National Antitrust Case

Utah Attorney General Sean D. Reyes Commends Office’s New Markets and Financial Fraud Division for Major Role in American Express Antitrust Case Success

Decision Benefits Large and Small Merchants, Allows for Consumer Discounts

SALT LAKE CITY Feb. 20, 2015 — Since taking office 14 months ago, Attorney General Sean D. Reyes has made it clear that leveling the playing field in business is a priority. Last spring, AG Reyes launched the new Markets and Financial Fraud Division led by David Sonnenreich. Director Sonnenreich and Assistant Attorney General Ronald Ockey have consistently worked with the U.S. Department of Justice and 16 other states on a case challenging American Express Co.’s anti-steering rules. Yesterday, a federal judge found the anti-steering rules – which prevented merchants from offering discounts to consumers who used certain brands of credit cards over others – violated federal antitrust laws.

The case involves fees that merchants have to pay credit card companies when they accept credit card payments from consumers. For years, the major credit companies prohibited merchants from telling consumers about those fees and from offering discounts to consumers who used certain (cheaper-for-the-merchant) credit card brands over others.

“I highly commend the leadership and legal work performed by our new Markets and Financial Fraud Division. Director David Sonnenreich and Ronald Ockey have been involved with this case since the beginning and have played key roles in moving it forward,” said Attorney General Sean Reyes. “Antitrust cases demand detail-focused expertise and this area of law is critical in leveling the playing field for large and small businesses alike.”

In yesterday’s decision, a federal judge ruled that the restrictions American Express placed on merchants violated antitrust laws, reducing competition among credit card companies and leading to higher prices for merchants and in turn for consumers. The judge also ruled that increased competition among credit card companies would lead to lower prices for merchants, allowing merchants to pass on those savings to consumers through lower prices.

The decision, filed in the U.S. District Court for the Eastern District of New York, also means that agreements the states and the U.S. Department of Justice reached previously with MasterCard and Visa can be fully implemented pending the conclusion of any appeals to today’s decision.

Visa and MasterCard settled similar antitrust charges in 2010, agreeing to remove or revise many of their anti-steering rules. The settlements require Visa and MasterCard to allow merchants to offer discounts, incentives, and information to consumers to encourage the use of payment methods that are less costly to merchants.

Utah joined Arizona, Connecticut, Idaho, Illinois, Iowa, Maryland, Michigan, Missouri, Montana, Nebraska, New Hampshire, Ohio, Rhode Island, Tennessee, Texas and Vermont.

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