![Federal appeals court revives New York credit card surcharge ban](https://www.jurist.org/news/wp-content/uploads/sites/4/2020/03/shutterstock_657639088.jpg)
[JURIST] The US Court of Appeals for the Second Circuit [official website] on Tuesday ruled [opinion, PDF] that a New York state law [text] banning retailers from imposing surcharges on credit card purchases was constitutional, overruling a lower court decision. The appeals court voted 3-0 that the law, which sets out criminal penalties for retailers that impose surcharges on customers who pay using credit cards, does not violate the retailers’ rights to free speech and due process under the Constitution. Retailers charge customers to use credit cards because they are required to pay “swipe fees” to the credit card companies every time a customer uses one. The decision is considered a victory for consumers, as most do not know about such fees until they are about to make their purchases, leaving them with the options of either accepting the charges or leaving to make their purchases elsewhere. Ten other states have adopted similar measures to stop retailers from imposing these fees.
Credit card fees have caused litigation around the world. In October 2013 a judge for the US District Court for the Southern District of New York struck down [JURIST report] the same state law. The court held that this “virtually incomprehensible distinction between what a vendor can and cannot tell its customers offends the First Amendment and renders section [the law] unconstitutional.” The court enjoined the state from enforcing the law. In 2012 the European General Court, the EU’s second highest court, rejected [JURIST report] a challenge by MasterCard over its cross-border credit card fees. The court upheld a decision by the European Commission that the fees violate EU antitrust rules. In 2010 the US Department of Justice (DOJ) filed a civil antitrust lawsuit [JURIST report] against MasterCard, Visa and American Express [corporate website]. The lawsuit challenged rules utilized by the companies that prevented merchants from providing discounts and rewards for using credit cards with lower merchant fees. The DOJ contended that these rules unfairly inflate costs for both consumers and merchants. Visa and MasterCard agreed to a settlement that required the companies to allow merchants using their cards to express a preference for types of payments accepted, to offer discounts to consumers for using a particular card or type of payment and to provide consumers with information regarding the costs incurred by the merchant when a particular type of credit card is used.