10 states sue to stop T-Mobile and Sprint merger News
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10 states sue to stop T-Mobile and Sprint merger

Attorneys general for 10 US states brought a civil antitrust suit Tuesday to permanently enjoin the proposed acquisition of Sprint by T-Mobile.

T-mobile and Sprint are two of only four mobile network operators (MNOs) in the US and serve approximately 80 million and 55 million customers, respectively. T-Mobile’s previously attempts to merge with AT&T and Sprint were both abandoned due to antitrust reasons.

The proposed transaction would reduce the number of MNOs in the US from four to three and, according to the complaint, would result in an increase in market concentration that significantly exceeds the thresholds in violation of the antitrust laws. This increased market concentration will allegedly result in diminished competition, higher prices, and reduced quality and innovation. Economists estimate that the merger could cost Sprint and T-Mobile subscribers at least $4.5 billion annually.

In the complaint, the attorneys general also noted that entry by a new provider would be difficult, time consuming, and expensive, and would not be likely, timely, and sufficient to thwart the competitive harm resulting from the merger.

The merger is now pending approval of the Federal Communications Commission (FCC) prior to its closing. On May 20 Sprint and T-Mobile made certain commitments to the FCC. The attorneys general said in the complaint the commitments will not resolve the harms to competition that will result from the merger.