Amex settles a suit filed over its ads.

Settling a lawsuit filed by MasterCard International Inc., American Express Travel Related Services Co. has agreed not to run advertisements making negative comments about MasterCard's corporate card program.

MasterCard filed suit March 3 in U.S. district court in New York, claiming that three American Express ads in business travel and entertainment publications were "false, misleading, and disparaging."

MasterCard was especially angry about an ad alleging hidden late fees in some banks' MasterCard. BusinessCard programs.

MasterCard Defends |Image'

"That's just not the case," said Daniel T. Murray, MasterCard's senior vice president and general manager of credit products. MasterCard sought to clear the record because "we certainly don't want to have a tainted image," especially when the claims are not true."

American Express said the ads began in October and had about run their course by the time MasterCard sued.

"We stand 100% behind the original campaign," said an American Express spokeswoman. "In fact, phase two is very much the same theme." That phase begins today.

One of the ads, "Fee Simple" attacks MasterCard's and Visa's varying fee structure saying American Express offers one-fee structure.

Countersuit Was Filed

The spokeswoman said American Express did not view the legal outcome as a defeat. It settled to avoid the costs of a lengthy defense.

American Express had filed a countersuit in April, claiming two MasterCard BusinessCard ads were misleading. .

"That just had no substance at all," Mr. Murray said.

The settlement permits MasterCard to continue using those ads, which it will do on a regional basis.

"This sends a strong message that MasterCard will continue to aggressively defend our products and our members' programs when they are attacked," said Robert E. Norton Jr., the group's senior vice president and general counsel.

The MasterCard BusinessCard program, begun in 1985, has one million cards in circulation, compared to 5.4 million American Express corporate cards, which started in 1970.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER