The skirmish, the latest in a series of cat fights in the intensely competitive credit card market, is more than just another legal maneuver. It's the latest sign of a newly aggressive strategy by AmEx designed to put Visa on the defensive while portraying itself as the unfairly maligned underdog.
In a sense, AmEx is using the law as a marketing weapon, raising a ruckus over what it calls Visa's unfair tactics.
"We will take them to task whenever we feel they're not telling the whole truth about how their advertising with merchants is arranged," said Marcos Rada, director of public affairs. "We can't let it go unchallenged."
But AmEx's ultimate success in building merchant support and consumer charge volume depends on whether its claim, brought Jan. 24 in U.S. District Court, New York, is perceived as a worthy argument or a desperate ploy.
At issue this time is an article in a promotional newsletter, Service That Sells!, published by Pencom Press, Denver, and distributed by Visa to more than 25,000 restaurants that accept the bankcard.
The newsletter's Jan. 15 edition included an article on Mr. Puck, the Los Angeles chef and owner of several restaurants, who's featured in one of Visa's newest network TV spots from BBDO Worldwide, New York.
In a departure from other lawsuits, AmEx isn't disputing the campaign itself, which began Jan. 17. Instead, it's complaining about the article's description of how Mr. Puck came to drop AmEx from two of his restaurants, Spago in Los Angeles and Granita in Malibu, Calif., site of the new TV spot.
The article asserted Mr. Puck last summer tested a "We Prefer Visa" promotion that "shifted card usage to Visa from AmEx in nearly 50% of all transactions, resulting in a savings of thousands of dollars in lower credit card fees" charged by Visa, with no loss of customers. The article implied that other restaurants could similarly drop AmEx with no adverse effect and said Mr. Puck decided to do so permanently after the test proved successful.
But AmEx contends Mr. Puck's Visa deal was signed in July, a month before the "We Prefer Visa" test. It says that, contrary to the article, his Chinois on Main in Santa Monica and Spago in Las Vegas haven't dropped AmEx. And AmEx claims its own records of Mr. Puck's restaurant charge volume don't support Visa's contention that half of AmEx volume shifted to Visa.
Visa says Mr. Puck also ran a similar test in the summer of 1992.
"We think AmEx is grasping at straws on this," said Gregory Holmes, a spokesman for Visa USA. "We don't have to pay merchants not to accept AmEx," he said, claiming Visa approached Mr. Puck about a commercial only after learning he planned to drop AmEx. "It appears they're using the court system now to attack Wolfgang Puck for making a sound business decision to drop the [AmEx] card."
Mr. Holmes acknowledged the article's error in listing the two other restaurants as having dropped AmEx. He said a correction has already been distributed.
AmEx is asking a judge to order Visa to cease from distributing the promotional material, to correct "misinformation" contained in it and to include disclosures in future ad campaigns that merchants have received "promotional considerations" for dropping AmEx, including the TV spots themselves. AmEx also seeks unspecified damages.