The U.S. Supreme Court cast doubt on a lower court's ruling that would let merchants collectively claim that American Express Co. violated federal antitrust laws by forcing retailers to honor all its cards.

On Monday the justices told the Second U.S. Circuit Court of Appeals in New York to reconsider its decision, which said the merchants were not bound by an arbitration agreement requiring them to press any complaints against Amex individually. The justices pointed to an April 27 decision in which they said companies cannot be forced to submit to class arbitration unless they had previously agreed to do so.

The New York and California merchants contend Amex is illegally bundling its products through its "honor all cards" policy.

The retailers want to be able to accept Amex charge cards without taking its credit cards. The complaint says the credit cards aren't used by the high-end customers retailers prefer and hence aren't worth the fees.

Amex's standard agreement with merchants calls for all disputes to be resolved through individual arbitration. The appeals court said that clause "cannot be enforced in this case because to do so would grant Amex de facto immunity from antitrust liability."

The Second Circuit's ruling resolved only the class-action question, leaving Amex with a choice to have the case proceed in arbitration or in court. The company opted to have the case go forward in court.

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