The 2nd U.S. Circuit Court of Appeals in New York said a lower court judge in Brooklyn erred in February 2015 in finding that American Express’ “anti-steering” rules violated federal antitrust law.

Underlying the case were the fees that merchants pay to process transactions, which the U.S. government estimated at more than $50 billion a year, and which can be passed along to cardholders in the form of higher prices.

The lower court judge, Nicholas Garaufis, had found that non-discrimination provisions (NDPs) in American Express’ merchant agreements, meant to dissuade customers from using cards from Visa and MasterCard, unreasonably restrained competition.

But the appeals court said Garaufis erred by focusing entirely on the interests of merchants rather than cardholders who might benefit from American Express (AXP) rewards programs and perceived prestige.

“Though merchants may desire lower fees, those fees are necessary to maintaining cardholder satisfaction,” Circuit Judge Richard Wesley wrote for a three-judge panel.

“So long as AmEx’s market share is derived from cardholder satisfaction, there is no reason to intervene and disturb the present functioning of the payment-card industry,” he added.

Shares of American Express, whose largest shareholder is billionaire Warren Buffett’s Berkshire Hathaway, closed down 43 cents, or 0.7%, at $63.42. The shares had been down about 1.4% when the decision was issued.

Freedom to Choose

The decision may help American Express compete for space in customer wallets with Visa (V) and MasterCard (MA), whose cards are more plentiful but whose customers spend less.

It may also help American Express boost revenue as it cuts costs to help offset the loss of lucrative co-branding relationships such as with Costco Wholesale (COST).

Monday’s decision is also a defeat for the U.S. government and 17 states, led by Ohio, that challenged American Express’ anti-steering rules.

Visa and MasterCard settled similar lawsuits in 2011 by agreeing to change their rules.

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Mark Abueg, a U.S. Department of Justice spokesman, declined to comment. Kate Hanson, a spokeswoman for Ohio Attorney General Mike DeWine, said they were reviewing the decision.

“American Express earned a major victory today,” Chief Executive Kenneth Chenault told employees in a memo reviewed by Reuters.

“It is unfair to allow merchants who have agreed to honor our cards to then discriminate against American Express and our card members, and it is fundamentally unfair to interfere with consumers’ rights to choose how they want to pay,” he said.

Lawyers for dozens of retailers, such as Target (TGT) and Wal-Mart Stores (WMT), had argued that voiding American Express’ anti-steering rules would encourage competition, and drive prices they pay to card networks lower.

Injunction

In his ruling, Garaufis had said the non-discrimination provisions enabled American Express to wrongfully exploit its 26.4% share of purchase volume in the U.S. credit and charge card market.

The judge later imposed an injunction that also allowed merchants to offer discounts, rebates and other incentives to customers for using other cards with lower fees.

But in December, after American Express said the injunction would cause irreparable harm, the appeals court temporarily lifted it, enabling the company to enforce its rules during the appeal.

Monday’s decision means it can continue doing so.

See also: How American Express Is Getting Killed by MasterCard and Visa—in One Chart

Visa and MasterCard together have about 1.2 billion cards in the United States. American Express had 47 million as of June 30, down about 15% from 55.3 million a year earlier.

The case is U.S. et al v. American Express Co et al, 2nd U.S. Circuit Court of Appeals, No. 15-1672.