Sprint has filed suit to block proposed AT&T and T-Mobile merger. Sprint has joined the battle calling their merger “brazenly anticompetitive,” after the U.S. Justice Department effort to block the pending merger. Sprint has outlined three main points which they believe would happen if this merger was to take place.
- Harm retail consumers and corporate customers by causing higher prices and less innovation.
- Entrench the duopoly control of AT&T and Verizon, the two “Ma Bell” descendants, of the almost one-quarter of a trillion dollar wireless market. As a result of the transaction, AT&T and Verizon would control more than three-quarters of that market and 90 percent of the profits.
- Harm Sprint and the other independent wireless carriers. If the transaction were to be allowed, a combined AT&T and T-Mobile would have the ability to use its control over backhaul, roaming and spectrum, and its increased market position to exclude competitors, raise their costs, restrict their access to handsets, damage their businesses and ultimately to lessen competition.
“Sprint opposes AT&T’s proposed takeover of T-Mobile,” said Susan Z. Haller, vice president-Litigation, Sprint. “With today’s legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal.”
The lawsuit specifically cites Section 7 of the Clayton Antitrust Act of 1914, which elaborates on specific and crucial concepts of the Clayton Act, an amendment on the Sherman Antitrust Act of 1890 to stop mergers and acquisitions judged to substantially weaken competition in specific industries (specifically dealing with holding companies).
From the get go, Sprint hasn’t been a fan of this situation and has voiced its opinions from the beginning. They have urged the government to block the deal believing that the merger would “let the wireless industry regress inexorably toward a 1980s-style duopoly.” What do you guys think?
Visit Sprint Press release in regards to filing suit
For more information on the Antitrust Division can be found on the U.S. Department of Justice site.