The U.S. Department of Justice filed an antitrust lawsuit today to block AT&T’s $39 billion merger with T-Mobile. The merger, which would create the largest wireless company in the U.S., would have been a deal between the nation’s second- and fourth-largest wireless phone carriers. The Department of Justice filed the suit on antitrust grounds, stating that the merger would substantially lessen competition, result in higher prices and give consumers lower quality and less innovative products. Along with Verizon, the two merged companies would account for 78% of the industry’s revenue and over two-thirds of wireless customers in the U.S.
AT&T was shocked by the filing, having been given no indication although plans for the merger have been public for many months. AT&T also stated that it has been actively involved in discussions with both the Justice Department and the Federal Communications Commission since the proposal was first announced in March. AT&T stated that it plans to fight the suit, albeit, it could be lengthy and block the deal from moving forward for a considerable amount of time.
I like the Department of Justice’s sentiment to protect the consumer, but I am not convinced pulling T-Mobile out of the marketplace is going to make much impact on wireless products or pricing –this isn’t exactly a merger between AT&T and Verizon. It seems to me the government could find better things to spend our precious money on rather than this suit.
What are your thoughts?