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Report: Supreme Court justices question American Express' merchant fees

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Report: Supreme Court justices question American Express' merchant fees

Several U.S. Supreme Court justices expressed skepticism of American Express Co.'s so-called "anti-steering" provisions in contracts with merchants that prevent merchants from recommending customers use rival credit cards with lower fees, Reuters reported.

Justices Elena Kagan, Sonia Sotomayor and Stephen Breyer questioned the provisions, with Kagan saying that they prevent merchants from passing on lower transaction fees to customers by charging less for their products.

"That sounds like a market that is not working the way it's supposed to," Kagan told the attorney for American Express. The court heard arguments in an appeal by states of a 2016 ruling by a lower court in New York that cleared American Express of unlawfully stifling competition.

American Express relies heavily on the fees it charges merchants, which are higher than its peers. The fees allow the company to offer its customers more services and perks.