Federal judge allows Sprint antitrust suit against AT&T, T-Mobile merger

[JURIST] A judge for the US District Court for the District of Columbia [official website] on Wednesday denied a motion to dismiss [opinion, PDF] a suit by Sprint [corporate website] to block the merger of AT&T and T-Mobile USA [corporate websites]. AT&T and T-Mobile argued that Sprint failed to properly allege that the merger would cause it "antitrust injury," thus it lacked standing to challenge the merger under 15 USC § 16 [text]. However, Judge Ellen Huvelle held that Sprint had stated a plausible claim that the merger would cause it injury in the market for acquiring mobile devices. The judge also allowed C Spire [corporate website], co-plaintiff with Sprint, to pursue a claim against the merger that it would negatively impact its roaming services. However, the judge dismissed the plaintiffs' remaining complaints that the merger would hurt them in the market for wireless spectrum and network development, as well as the market for backhaul, which is the "physical infrastructure ... that connects cell sites to the wireline network to which wireless calls are routed." Both sides stated that they were pleased with the ruling [Reuters report]. Sprint was happy that the judge allowed the case to go forward whereas AT&T was happy that several of Sprint's claims were dismissed.

Sprint is not the only entity attempting to block the merger of AT&T and T-Mobile. In August the US Department of Justice (DOJ) [official website] filed an antitrust lawsuit to block the merger [JURIST report] and a month later seven states joined [JURIST report] the DOJ's suit. The government argued that "AT&T's elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market." AT&T responded that acquiring T-Mobile will allow it to provide better services to its customers [JURIST report] as a result of the expansion of its mobile network and that smaller, regional carriers will still act as alternatives. 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.

 

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