Lawsuit Update Center
A class action lawsuit was filed against American Express Company and American Express Travel Related Services Company, Inc. The lawsuit accused American Express of using anti-steering rules in its merchant agreements to stop merchants from encouraging customers to use lower-cost payment cards. Plaintiffs alleged that those rules inflated prices for consumers who used Visa, Mastercard, Discover, and debit cards, even if they never used an American Express card.
The case was filed in the United States District Court for the Eastern District of New York in 2019. It was litigated for years, certified in part, tried to a jury, and ultimately settled after trial. In July 2026, the court gave final approval to a $17.5 million settlement.
July 2026 American Express Settlement Update
American Express has received final approval for a $17.5 million settlement in the consumer anti-steering class action. The settlement was approved in July 2026 by Judge Nicholas G. Garaufis in the United States District Court for the Eastern District of New York.
The settlement ends a case filed in 2019 and litigated through a three-week trial. The jury reached a split verdict. It found American Express liable for unfair acts or practices under Illinois law and awarded $12.5 million, while rejecting several other state antitrust claims. The $17.5 million settlement replaces that verdict and resolves the remaining risk for both sides.
The court also awarded class counsel $5.83 million in attorneys’ fees and more than $7 million in litigation expenses. Judge Garaufis noted that, without the settlement, there remained a risk that the certified classes could have recovered less or nothing from American Express.
The official settlement website reports that the court issued a final approval order on July 7, 2026. Consumers who were eligible to submit claims had to follow the settlement claim process and deadlines set by the settlement administrator. That deadline has now passed.
The cash-payment part of the settlement was also narrower than many consumers might expect. The settlement website explains that consumers in the Illinois non-rewards credit card class could seek compensation from the settlement. That generally means Illinois consumers who used a non-rewards Visa, Mastercard, or Discover credit or charge card at qualifying merchants during the covered period. Consumers outside that group may still have been part of the broader litigation history, but they were not the group eligible for a cash payment from this settlement.
What Is the American Express Lawsuit About?
The lawsuit, filed in the United States District Court for the Eastern District of New York, was brought on behalf of consumers who used electronic payment methods other than American Express cards. The plaintiffs alleged that American Express’s anti-steering rules in its merchant agreements restrained competition and inflated prices in the credit and debit card market.
At the heart of the lawsuit were consumers who used credit and debit cards from networks such as Visa, Mastercard, and Discover, but not from American Express. They claimed that Amex’s rules increased merchants’ costs and that merchants passed those costs along to consumers in the form of higher prices.
The plaintiffs alleged that American Express’s anti-steering rules led to higher transaction costs, fewer lower-cost card transactions, and higher prices for consumers. The lawsuit sought damages, restitution, and other relief for the alleged harm caused by these practices.
What Are Anti-Steering Rules?
Anti-steering rules are contract provisions that restrict what merchants can say or do at the point of sale. Plaintiffs alleged that American Express used these rules to stop merchants from steering customers toward cards that charged merchants lower fees.
In practical terms, the claim was that a merchant that accepted American Express could not tell a customer, “Please use this other card because it costs us less,” or offer incentives that would push consumers away from Amex and toward a lower-cost payment method.
Why does that matter? Because merchants usually build payment processing costs into the prices everyone pays. If card fees are higher, the plaintiffs argued, all consumers can end up paying higher retail prices, including consumers who never use an American Express card.
Two Classes of Plaintiffs
The plaintiffs sought to certify two broad groups: one for credit card users and another for debit card users. They argued that American Express’s anti-steering rules violated federal and state antitrust laws, state consumer protection statutes, and unjust enrichment principles.
The case focused on transactions at major merchants, including national retailers and grocery chains. The plaintiffs’ theory was that Amex’s rules affected the broader market, not just Amex cardholders.
The court granted class certification for debit card users from several states and the District of Columbia. The court denied certification for the proposed credit card class because the plaintiffs had not shown that injury to that group could be proven with common evidence in the same way.
That certification ruling shaped the rest of the case. It allowed a significant part of the lawsuit to move forward, while narrowing the claims that could be tried on a class-wide basis. By the time the case settled, the cash-payment process was focused on the Illinois non-rewards credit card class.
The Trial and Verdict
The case eventually went to trial. After a three-week trial, the jury reached a split verdict. Plaintiffs won on an Illinois unfair acts or practices claim, resulting in a $12.5 million verdict. But American Express prevailed on several other state antitrust claims.
That mixed result posed a risk to both sides. Plaintiffs had a verdict, but not on every claim. American Express faced a damages award, but still had post-trial arguments and appeal rights. The $17.5 million settlement avoided the uncertainty of further litigation.
This Has Been a Long Battle
This lawsuit was part of a much longer fight over American Express’s anti-steering rules. Years earlier, the U.S. District Court for the Eastern District of New York ruled against American Express after a bench trial brought by the Department of Justice and several states.
That earlier case focused on whether Amex’s rules restrained competition by preventing merchants from encouraging customers to use less expensive payment methods. The district court found that the rules had anticompetitive effects, but the case later took a different path on appeal and in the United States Supreme Court.
The consumer class action was different. It was not the government’s case. It was brought by consumers who claimed they paid higher prices because merchants were restricted from steering customers to lower-cost cards.
How Credit Card Merchant Fees Work
In the Visa and Mastercard systems, merchant fees generally include several components: a network fee, an acquirer fee, and an interchange fee. The interchange fee is usually paid to the bank that issued the card. The total fee can vary depending on the merchant, the card type, and the rewards attached to the card.
High-reward cards often cost merchants more to accept. Those costs are not invisible. Merchants may respond by raising prices across the board, which means consumers using lower-cost payment methods may still help cover the cost of more expensive cards.
American Express uses a different pricing model. It generally charges merchants a merchant discount fee for accepting Amex cards. Amex cards are often attractive to cardholders for their rewards and benefits, but merchants have historically complained that accepting Amex can be more expensive than accepting other payment methods.
This is why many small businesses do not accept American Express. The fee structure can make Amex less attractive to merchants, especially if margins are tight.
Why Consumers Claimed They Were Harmed
The plaintiffs’ theory was that Amex’s anti-steering rules protected higher merchant fees. If merchants could not encourage customers to use lower-cost cards, the plaintiffs argued, Amex could keep charging higher fees with less competitive pressure.
Those fees, according to plaintiffs, were then passed on to consumers in the form of higher retail prices. The alleged harm was not limited to Amex users. The claim was that consumers using Visa, Mastercard, Discover, or debit cards also paid more because retail prices reflected the cost of accepting Amex.
That is the key point of the lawsuit. Plaintiffs were not saying that only Amex cardholders were harmed. They were saying that non-Amex consumers helped subsidize Amex’s merchant fees and rewards system through higher prices.
There Was a Lot on the Line
General-purpose credit and charge cards are a major part of the American economy. Consumers spend trillions of dollars each year using electronic payment cards. Even small changes in merchant fees can matter when applied across millions of transactions.
That is why the anti-steering issue has drawn so much attention from regulators, merchants, consumers, and courts. If merchants are free to steer customers toward cheaper payment methods, card networks may face more pressure to lower fees. If merchants cannot steer, higher-cost cards may remain insulated from that pressure.
The American Express settlement does not rewrite the entire credit card market. But it does resolve a major consumer case that challenged how Amex’s merchant rules affected prices paid by ordinary consumers.
