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Ben Glass
Ben Glass
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Supreme Court Sides with American Express on Arbitration – and They are Right

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The Supreme Court of the United States has ruled that merchants who voluntarily signed contracts allowing them to accept American Express cards must arbitrate any disputes they have with American Express.

The reason? That's what it says in the contract!

There is nothing particularly novel about forcing parties who have voluntarily entered into a private agreement to abide by the rules they agreed on.

The dispute arose when merchants objected to American Express's requirement that they accept all versions of the credit card. They complained that American Express's "monopoly" power forced the to accept cards at rates about 30% higher than competing companies.

That complaint was absurd on its face and this lawsuit should never have seen the light of day.

If a merchant didn't like the terms that American Express was offering then the merchant had at least three choices:

  1. Accept cash only
  2. Call Visa or Mastercard
  3. Develop its own credit card system

America is all about giving you as many choices in life as you can get. Our country was built on capitalism, which allows you to enter into voluntary agreements to trade your service or product to another person or entity at any terms the two of you can agree on.

If the merchants here didn't like American Express then they didn't need to do business with them and they certainly didn't need to sign a contract limiting their disputes to arbitration.

That's what choice is all about.

1 Comment

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  1. Mike Bryant says:
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    Interesting look Ben. I don’t agree with the the overall position of the Court as to mandatory arbitration over all, but you are correct as to this particular case.