Bloomberg reports that the United States Department of Justice filed suit to block the pending merger between AT&T and T-Mobile. Stating that $39 billion purchase of T-Mobile by Big Blue would "substantially lessen competition," the DOJ has thrown down the gauntlet with case number 11-01560, U.S. v. AT&T, filed in U.S. District Court, District of Columbia.
"AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market," the government stated in the filing.
AT&T claimed it was surprised by the lawsuit brought by the government, and that they would be seeking an expedited hearing in the matter. The proposed merger would have created a new market leader among wireless carriers, surpassing current leader Verizon and leaving now third place carrier Sprint in the dust.
Some analysts feel this lawsuit could just be a negotiating tactic by the DOJ, as they are seeking to regulate certain aspects of the deal. Bert Foer, head of the American Antitrust Institute in Washington, doesn't see it that way at all. He states that the DOJ has "clearly drawn a line in the sand" and "I don’t see any room to settle the case."
"If it could be settled, they would still be talking about it," Foer said.
The government, clearly, has strong feelings on the issue. At a news conference, the acting head of DOJ antitrust division, Saris Pozen, said, "Any way you look at this transaction, it is anticompetitive."
Via Bloomberg
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ersatzevan
August 31, 2011 at 8:39pm
How is this even legal? It doesn't make much sense to be honest.
brandonwalkermedia
August 31, 2011 at 10:06pm
well its not thats why the founding fathers caused the earthquake when they turned over in there graves.
brandonwalkermedia
August 31, 2011 at 12:51pm
The current president want's to create jobs but uses the #DOJ to block a #merger that will create around 5000 new cell sites & 2-8000 new #USJobs? I'm thinking he is trying to just use these speeches to detour viewers from next weeks GOP debate when secretly killing the opportunities to create US Jobs.
More evidence is the fact they are now trying to regulate Apps, yea that will create jobs! To much regulation.
chauncey007
August 31, 2011 at 3:27pm
How does a merger create new jobs? Seems like there would be some efficiencies gained from one management structure, rather than two. If the cell sites are going to be constructed under one company - similar expansions would be made by each as individuals.
I'm not sure if I'd rather have regulation on the merger, or let it go and get raped by ATT now that there is only one main competitor to contend with. Either way, the government AND corporations are corrupt. Faith placed in any system, political or otherwise, will be abused.
brandonwalkermedia
August 31, 2011 at 10:04pm
think about it converting thousands of cell sites to one network takes people and part (because at&t will have to upgrade t-mobiles low capability network) that creates more jobs. but to address what you said Cell companies have a lot of regulation so a merger would create jobs with-in 6 moths vs. the same amount of jobs would take around 2.5 years. this was pointed out in the report the AT&T & T-Mobile gave the Gov to view when it proposed the merger.
