Supreme Court Rules Credit Card Fees are Covered Under Free Speech
The U.S. Supreme Court has thrown out a 2015 lower court’s ruling that upheld a New York law, which barred retailers from charging customers more when they paid with their credit cards. SCOTUS sent the case back to a lower court, and instructed that court to hear the case on the grounds of free speech and not on price regulation.
Whenever a customer completes a transaction with a credit card, the merchant has to pay a fee to the credit card company. The New York law, which is similar to those found in nine other states, prevented retailers from charging a different price to those paying with their credit card. It also barred merchants from calling the fees paid to card companies “surcharges” while adding that surcharge to the price of the product. Retailers could still offer discounts to those paying with cash. Merchants violating the law were subject to a potential one-year prison sentence and $500 fine.
The merchants in the case were arguing the law is a violation of their free speech rights, and the unanimous ruling, which was authored by Chief Justice John Roberts, agreed. Roberts wrote that businesses “want to make clear that they are not the bad guys.” SCOTUS did not rule whether the measure is lawful.
A spokeswoman for New York Attorney General Eric Schneiderman told the Associated Press, “We respect the court’s decision and will continue to defend the statute on remand” to the lower court.