Seven states, including California, Illinois, Massachusetts, New York, Ohio, Pennsylvania and Washington, on Friday joined an antitrust lawsuit [amended complaint, PDF] initiated by the US Department of Justice (DOJ) [official website] attempting to block a proposed $39 billion acquisition of cellular carrier T-Mobile USA by Telecom giant AT&T [corporate websites]. The lawsuit, filed by the DOJ in August [JURIST report], cites the important role T-Mobile has played in keeping prices down by creating pressure on the other large carriers, including not only AT&T, but also Verizon Wireless and Sprint Nextel [corporate websites]. New York Attorney General Eric Schneiderman [official website] announced his decision [press release] to join the DOJ lawsuit on behalf of New York, saying the merger would have a negative impact and should be barred:
This proposed merger would stifle competition in markets that are crucial to New York's consumers and businesses, while reducing access to low-cost options and the newest broadband-based technologies. We must do everything we can to encourage innovation and job creation. In vulnerable upstate communities, where concentration in some markets is already very high, and in New York City's information-intensive economy, the impact this merger would have on wireless competition, economic growth, and technological innovation would be enormous.In its response to the suit, filed last week [JURIST report] in the US District Court for the District of Columbia [official website], AT&T argued that acquiring T-Mobile will allow it to provide better services to its customers [AP report] as a result of the expansion of its mobile network. In addition, AT&T contends that smaller, regional carriers will act as alternatives to consumers and thus not allow the market to be completely dominated by itself, Verizon and Sprint. The case is set to be heard on September 21.
The worldwide consolidation of media is an ongoing global concern. In August, a class action lawsuit was filed [JURIST report] against Apple [corporate website] and five major publishers for allegedly colluding to illegally fix electronic book (e-book) prices. Communication Director for Free Press, Dave Saldana argued last July [JURIST op-ed] that the proposed AT&T/T-Mobile deal is an example of the enormous influence large media corporations can bring to bear through massive public relations blitzes and the acquisition of political influence through the pouring of money into lobbying efforts and campaign contributions. Saldana said that, for these reasons, AT&T remains confident that its T-Mobile purchase will go through, "because it knows it has several hundred million reasons to push for the merger, and millions of means to get it." Saldana warned that media consolidation is dangerous because it gives the companies leverage to sway public opinion and dominate the narrative when their own practices are questioned.