This is breaking news. The US has filed suit to block the AT&T Merger with T-Mobile. This is great news for consumers, and great news for the sustainablity of competetition and, by extension, capitalism. More after the squiggle...
Bloomberg news broke the story this morning:
The Justice Department complaint was filed today in federal court in Washington. The U.S. is seeking a declaration that Dallas-based AT&T’s takeover of T-Mobile, a unit of Deutsche Telekom AG (DTE), would violate U.S. antitrust law and a court order blocking any arrangement implementing the deal.
“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the U.S. said in its filing.
All I can say is, "It's about freaking time!" Especially since recent advertising by AT&T mocked opponents of the merger by implying the merger was a done deal. Hopefully more details will come out as the day progresses. The case is U.S. v. AT&T Inc. (T), 11-01560...
8:24 AM PT: Here is a link to the Department of Justice press release:
http://www.justice.gov/...
10:18 AM PT: And now The Wall Street Journal weighs in ON THE SIDE OF THE LAW!
http://online.wsj.com/...
AT&T's problem is that the legal issues aren't on its side. Antitrust lawyers had said in recent days that the company's chances of winning approval rested on political issues trumping legal concerns. The fact that the government challenged—months earlier than observers had expected—demonstrates that the legal issues won the day.
On the most basic level, it was evident before the filing, the combination exceeds concentration of market share levels—as defined by the Herfindahl-Hirschman index—that the federal government generally finds acceptable. Divestitures could resolve the concentration risk, of course. But AT&T will find it harder to get around the reality that a merger would reduce the number of national wireless firms from four to three—in the process eliminating a low-priced competitor.