The U.S. government is out to stop the proposed merger of AT&T and T-Mobile, said Edward Wyatt in The New York Times. The Department of Justice has filed an antitrust suit seeking to block the $39 billion deal, arguing that a marriage of America’s No. 2 and No. 4 wireless phone carriers will result in higher prices for consumers, less mobile innovation, and fewer U.S. jobs. “Consumers will suffer” if this deal goes through, said Justice official Sharis A. Pozen. AT&T has vowed to fight the suit, which “could take years to wind its way through the courts.”
If you need convincing that the government has made the right move, just “spend a few minutes comparing mobile phone rates online,” said Bloomberg.com in an editorial. T-Mobile offers consistently lower prices than other carriers and competes with AT&T in 97 of the 100 biggest U.S. metro areas. AT&T says “don’t worry” about higher prices if it takes over T-Mobile, but “there is a lot to worry about.” A merged AT&T and its main rival, Verizon, would have 80 percent of the U.S. market and “could start colluding—without even needing to talk to one another,” said Ryan Singel in Wired.com. At the end of the day, AT&T hasn’t made a “persuasive case that consumers would be better off” or that it would stay “motivated to innovate or keep prices low,” said the Los Angeles Times. This suit shows why antitrust laws exist, and the government was right to side with competition—and consumers.
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