A federal court in Brooklyn, N.Y. on Thursday ordered American Express to revise its merchant agreements. Provisions that bar merchants from preferring another form of payment need modification or elimination, the court found. Absent a winning appeal, the decision seems likely to hurt Amex's competitiveness.

It appears merchants such as airlines would be free to promote alternative payment platforms, perhaps by using lower fares. To prevent such activity, known as steering, Amex may have to reduce its fee . . .

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