The Department of Justice is attempting to block AT&T’s plans to take over T-Mobile on anti-trust grounds.
Earlier this year, AT&T announced that it planned to take over T-Mobile US for $39 billion. But while the deal has gained support from several industry heavyweights, including Facebook and Microsoft, others have argued that it would stifle competition. Indeed, if it goes ahead, the deal will leave the US with just three national mobile operators.
And the DoJ appears to share these concerns. According to Bloomberg, it’s filed a lawsuit claiming that the takeover would ‘substantially lessen competition’ and asking US district judge Ellen Segal Huvelle to block the deal.
“The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services,” says deputy attorney general James M Cole in a statement.
“Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation’s wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition.”
The DoJ points out that the two companies currently compete in 97 of the largest cellular marketing areas, as well as in the business and governmental arenas.
And, it says, AT&T could enhance its own network perfectly well through direct investment, rather than through a takeover which would eliminate a competitor.
If the deal is blocked, it could proce pricey for AT&T, which would have to pay parent company Deutsche Telekom $3 billion in cash, hand over spectrum to T-Mobile and cut charges for calls into AT&T’s network.