American Express 2001 Annual Report Download - page 22

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In early 2002, we took steps to strengthen our competitive position by intro-
ducing a new set of products, services, customer communications and
partnerships. We also are increasing our focus on the Internet to meet the serv-
icing needs of small business owners. As part of this transformation, we adopted
a new name – OPEN: The Small Business NetworkSM – and introduced a
national advertising campaign to signal our broadened commitment to
helping small business owners succeed. The campaign underscored the
greater control over payment and financing that we provide customers.
In the commercial card area, we serve about 70 percent of the Fortune 500
U.S. companies. We have a strong presence among middle-market companies
(those with revenues of $10 million to $1 billion), where the potential for expan-
sion remains quite high. In an environment in which companies are
increasingly tightening expenses, we have increased signings of new commer-
cial card customers who recognize more than ever the value of expense
management solutions. These accounts represent significant potential for us
once the economy stabilizes and corporate spending increases.
During 2001, we added or expanded a number of Corporate Card relationships
with companies in the United States, including Prudential, Invensys, Apple
Computer, Inc., Delta Air Lines and EDS/AT Kearney, as well as about 7,000 mid-
sized companies. We signed ADP, Delta and BP, among others, as Corporate
Purchasing Card clients. We also announced a collaborative effort with Oracle to
ensure interoperability between our Corporate Purchasing Card and Oracle’s
iProcurement solution.
It is particularly noteworthy that, in October, a federal court ruled in favor of the
U.S. Department of Justice and found that Visa and MasterCard had violated
the country’s antitrust laws. The judge’s opinion found that the associations’
rules prohibiting banks from issuing American Express-branded cards in the
United States were illegal, harmed consumers and American Express, and sti-
fled innovation and competition. We are very pleased with the judge’s decision.
However, we were disappointed, but not surprised, by the stay of judgment
granted to Visa and MasterCard pending appeal. The U.S. District Court judge
reiterated that she is “fully confident” in her initial ruling, stating that the asso-
ciations’ bylaws “have had a significant adverse effect on competition and
axp_20
The use of purchasing cards by
corporations to buy office supplies
and equipment is growing. With
the introduction of American
Express’ Corporate Purchasing
Card in Spain and Switzerland
during 2001, the product is now
used by corporations in 25
countries around the world.