The U.S. Supreme Court accepted a case that could roil the credit-card business, agreeing to consider reviving government allegations that American Express Co. thwarts competition by prohibiting merchants from steering customers to cards with lower fees.

A federal appeals court had thrown out the lawsuit, saying the U.S. government and 11 states failed to prove that the American Express rules harmed cardholders as well as merchants.

The Supreme Court’s decision to take the case offers new hope to retailers trying to reduce the $50 billion in fees they pay to credit-card companies each year. It’s a boost for Discover Card Services, which says the rules undercut its ability to compete with American Express.

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Amex shares dropped 1.3 percent to $91.63 at 9:45 a.m. in New York, the biggest drop since August and the worst performance in the 67-company S&P 500 Financials Index. Discover gained as much as 2 percent, the most since September.

The states asked the Supreme Court to intervene, pointing to the "astronomical number" of credit-card transactions each year -- 22 billion totaling more than $2 trillion in 2011, according to court documents.

"Whether assessed from the perspective of consumers or from that of merchants, this case’s importance cannot be overstated," Ohio officials argued for the group.

While the U.S. Justice Department also sued American Express, it didn’t join the appeal to the Supreme Court. The Trump administration said that, while the appeals court ruling was wrong, the case didn’t meet the Supreme Court’s usual standards for review.

The justices will hear arguments early next year and rule by June.

Antitrust enforcers accused American Express of using its leverage over merchants to thwart competition from cards that would charge retailers lower fees. American Express’s agreements with retailers contain an "anti-steering" provision that bars them from doing anything to encourage the use of competing cards, such as offering discounts.

The Justice Department and states said the effect was to thwart rivals like Discover, which tried in the 1990s to adopt a low-cost business model, and to ensure that retailers would continue to pay high fees.

American Express urged the Supreme Court not to hear the case, saying the appeals court was correct. The company said that merchant fees help pay for cardholder rewards and that antitrust enforcers failed to account for those benefits.

"Amex uses the vast majority of merchant discount fee revenue to pay valuable benefits to cardholders to incentivize them to obtain and use an Amex card at that merchant rather than cards issued on other networks," the company argued.

The lawsuits originally targeted Visa Inc. and Mastercard Inc. over their anti-steering policies as well. Those two companies settled the claims in 2010.

The case is Ohio v. American Express, 16-1454.

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