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ATT-T-Mobile Merger Would Hurt US Consumers: US Govt's Lawsuit

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By Admin on August 31, 2011 12:26 PM

The U.S. government has filed suit to stop the merger between wireless carriers AT&T and T-Mobile. The AT&T antitrust lawsuit alleges that if the deal goes through, competition would be substantially lessened in the wireless market.

AT&T is currently the 2nd largest wireless carrier in the U.S., while T-Mobile is the 4th. The merger would essentially make AT&T the largest wireless carrier, reports Bloomberg.

The Justice Department is saying that the merger would result in fewer choices for consumers, lower quality products and higher prices, USA Today reports.

Antitrust laws are used to make companies compete fairly in the open market. U.S. antitrust laws are utilized to combat restraints on trade and are also used to break down monopolies, which are believed to create higher prices for consumers.

The Justice Department says that T-Mobile has been a vital part of the competitive wireless market. T-Mobile was the first to roll out a nationwide high-speed network, according to USA Today. Removal of T-Mobile as a competitor would thus be hurting the economy.

If the $39 billion merger does not go through, T-Mobile could be in serious trouble, reports USA Today. T-Mobile's owner Deutsche Telekom has said that it's not going to invest more into the already-struggling company.

And, if the merger does not go through, AT&T will not be walking away from the table without any losses. Including the fees they'll have to incur if they decide to fight the antitrust lawsuit, they have already promised to give T-Mobile $3 billion in cash and spectrum rights if the deal falls through, USA Today reports.

Will ATT and T-Mobile's merger really be stopped? AT&T's antitrust woes have only begun, as the suit was only recently filed, but there is the possibility that a resolution will be reached between the wireless carrier and the government, according to Bloomberg.

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