U.S. Justice Department Files Complaint to Block Merger of AT&T and T-Mobile

[dgstorm]

In a surprising twist, the U.S. Department of Justice has filed a complaint to block the sale of T-Mobile to AT&T for $39 Billion. The complaint was filed today in a federal court in Washington D.C. The Justice Department complaint indicated, “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. also said in its filing that the deal would “substantially lessen competition” in the wireless market. Additionally, the Bloomberg article also shared the following,

Should regulators reject the transaction, AT&T would pay Deutsche Telekom $3 billion in cash. It would also provide T-Mobile with wireless spectrum in some regions and reduced charges for calls into AT&T’s network, for a total package valued at as much as $7 billion, Deutsche Telekom said this month.

Now the ball is in the FCC's court, but it is looking grim for the AT&T/T-Mobile merger, and AT&T's stocks are taking a beating because of it. At the time of the Bloomberg article, AT&T shares dropped 96 cents to $28.66.

Source: Android.net via Bloomberg

 

[DaWolf85]

My thread in the Member News Depot was totally better :icon_razz:

I think this is good. They realized how bad this was for the consumer and went to block it, now we just have to hope the courts agree with them. And you better believe AT&T's going to have some damn good lawyers, they'd have to give T-Mobile billions in compensation if the deal falls through.

 

[gmorgan056]

I wonder if this will have ramifications on the Google-Moto deal.

 

[Sweettooth]

At&t....fail.

 

[Arkbird]

I wonder if this will have ramifications on the Google-Moto deal.

Google and Moto would still operating independently. AT&T is trying to absorb and take over T-Mobile. That's why this is a merger and the Google Moto deal is an acquisition.

But I agree with the Justice department. The only reason Verizon was able to get Alltel was because they were smaller...by a decent amount. T-Mobile is too large and competition between carriers would go way down. It would only be Verizon, AT&T, and Sprint as the three major national carriers. Not good in my opinion so I'm glad the Justice department is filing this complaint.

 

[X_TAC23]

I wonder if this will have ramifications on the Google-Moto deal.

I doubt it... simply because google isn't buying out moto.

 

[droid_mike]

I wonder if this will have ramifications on the Google-Moto deal.

Different situation. Moto is already 100% Android. Purchasing the company will not increase market share for Google's phone OS. That will be the key to approval. Google cannot be accused of leveraging the sale to stifle competition for Android phones vs. other types of phones. An argument can be made that it will hurt HTC and other companies, but it does not affect the share of non-android phones in the market, so it should be much easier sailing.

I must admit I'm pleasantly surprised by this. I've never seen the government actually try and block a merger. Ususally, they just try and get a better deal for the consumers who will be screwed by such a takeover. I'm sure there will be screams of "government is anti-business" or whatnot, but this move will be good for consumers and mobile-related business, too. Monopolies are bad for business, period. Chances are the government will not win, but consumers will win a better settlement. Also, Sprint may jump in and sweeten the offer for T-Mobile in the meantime. It's not over, yet!

Verizon has to be pleased as punch. Expect them to testify if this actually goes to trial.

 

[nikecar]

My thread in the Member News Depot was totally better :icon_razz:

I think this is good. They realized how bad this was for the consumer and went to block it, now we just have to hope the courts agree with them. And you better believe AT&T's going to have some damn good lawyers, they'd have to give T-Mobile billions in compensation if the deal falls through.

My thread was first.

http://www.droidforums.net/forum/dr...itrust-complaint-block-t-t-mobile-merger.html

 

[DaWolf85]

My thread was first.

http://www.droidforums.net/forum/dr...itrust-complaint-block-t-t-mobile-merger.html

Mine was still better

AT&T has issued a statement. They sound a little annoyed and seem to have been caught off-guard. There's also some classic AT&T arrogance, of course:

The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court.

Burden? What burden? It's pretty obvious, isn't it?
A merged carrier would be the only major GSM carrier in the U.S. It would eliminate T-Mobile, a company that provides cheap plans and quality devices to millions of consumers. It would eliminate the carrier that has embraced Android the most fully.
No matter what one says about T-Mobile, one cannot deny that it is a competitive force in this market, and that removing it would be the definition of anti-competitive.

 

[azules9780]

I saw this morning while reading the news that AT&T was trying to entice the government to help it push this merger through by offering to bring 5 call centers back to the US if the deal went through. The issues I see there is that 1) those are very low paying jobs. 2) How long would those call centers stay here? 3) They would have almost no overhead by bringing the call centers back here, meaning that they would lose virtually nothing if they decided to close up shop 1 year later. I see it as a cheap way to try and get the Feds to help push this deal through. The feds will say "hey! look we brought X amount of jobs here" and if they don't help out, AT&T can tout they are "actually" saving and creating jobs by this merger happening. And then every idiot in America will believe them because for the most part, people are lemmings and only believe the first headline they read; if they actually read at all.