Sprint isn't letting the Department of Justice have the stage to itself when it comes to filing suits against the proposed $39 billion acquisition of T-Mobile by AT&T.
Sprint today announced that has brought suit against AT&T and Deutsche Telekom to block the acquisition "as a violation of Section 7 of the Clayton Act." Section 7 of the Clayton Antitrust Act bars any person from acquiring "the whole or any part of the stock or other share capital" that would "substantially ... lessen competition, or to tend to create a monopoly." In its suit, Sprint argues that the proposed buyout would violate this act because it would lead to AT&T and Verizon Wireless controlling 75 percent of the wireless market while taking in 90 percent of the profits.
Sprint's antitrust suit comes less than a week after the U.S. Department of Justice filed an antitrust suit against the acquisition with the U.S. District Court for the District of Columbia. In its suit, the DOJ similarly argued that the proposed buyout would significantly damage competition in the wireless industry, especially because T-Mobile has historically offered low-cost wireless voice and data services for customers. The DOJ also contended that any efficiencies gained by combining AT&T and T-Mobile spectrum would not be enough to offset the damage done to U.S. consumers by further consolidation of the wireless industry.
For its part, AT&T seemed unbowed by the DOJ's suit as AT&T general counsel Wayne Watts released a statement saying the company was "surprised and disappointed by today's action," while also vowing "to ask for an expedited hearing so the enormous benefits of this [acquisition] can be fully reviewed."
AT&T's proposed purchase of T-Mobile has come under criticism from consumer groups, rival wireless carriers such as Sprint, and analyst firms such as the Yankee Group, which contend that the purchase would lead to the emergence of a duopolistic wireless telecom market controlled largely by Verizon and AT&T. Were the acqusition to pass regulatory muster, it would be the fourth major wireless carrier buyout in eight years, following AT&T-Cingular in 2004, Sprint-Nextel in 2005, and Verizon-Alltel in 2008. AT&T would become by far the largest wireless carrier in the United States with more than 130 million subscribers.
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