AmEX Issues Statement Following Proposals from EC

American Express Company

issued the following statement today based on preliminary reports characterizing the contents of the European Commission's draft proposals on payment industry regulation that is scheduled to be released next week. * The publication of formal proposals by the Commission will mark the start of a lengthy legislative process and review period. We expect these proposals to prompt extensive debate among many market participants. * The proposals focus primarily on and cap the interchange fees charged by four-party payment systems, such as Visa and MasterCard. * The discount rate that American Express charges merchants would not be regulated. * Our proprietary consumer and corporate card businesses are not covered by the proposed pricing caps. * Three-party systems, such as American Express, would only be covered when they license other institutions to issue cards, as in our Global Network Services Business. GNS represents a relatively small percentage of our European business. * The provisions that focus on separating the payment network and processing functions do not appear to impact proprietary networks like ours. Given the potential impact on consumers and competition within the European payments sector, American Express has been in touch with senior policy makers at the Commission and will continue to represent its positions vigorously throughout the process.