Money Matters - Simplified

Sprint goes to court against AT&T, T-Mobile merger

Sprint that offers a range of wireless and wireline communications services is arguing that Section 7 of the Clayton Antitrust Act prohibits any person from taking over whole or part of the stock or other share capital that would lessen competition and create a monopoly to a significant extent.

The proposed AT&T and T-Mobile merger faces another hurdle, this time from Sprint Nextel Corp.

Just a week after the United States Department of Justice sued to block AT&T’s bid to take over T-Mobile USA, Sprint has filed its own lawsuit to challenge the proposed combination of both companies.

Sprint filed an antitrust lawsuit on Tuesday (Sept. 6) against the proposed takeover in U.S. District Court for the District of Columbia, adding another hurdle to AT&T’s $39 billion acquisition of T-Mobile USA.

Sprint sues AT&T
Echoing the Justice Department’s argument, Sprint contended that the proposed merger would significantly damage competition in the wireless industry.

In its suit, the Overland Park, Kansas based telecommunications company alleges that the proposed AT&T and T-Mobile merger is an infringement of Section 7 of the Clayton Antitrust Act.

"By acquiring T-Mobile, AT&T would be removing a low-price and innovative maverick competitor that provides particularly disruptive competition," Sprint said in its lawsuit.

"The injuries to Sprint and the public at large would be irreparable if the merger were completed,” it added.

How proposed merger violates Clayton Antitrust Act?
In its suit, the Overland Park, Kansas based telecommunications company alleges that the proposed AT&T and T-Mobile merger is an infringement of Section 7 of the Clayton Antitrust Act.

Sprint that offers a range of wireless and wireline communications services is arguing that Section 7 of the Clayton Antitrust Act prohibits any person from taking over whole or part of the stock or other share capital that would lessen competition and create a monopoly to a significant extent.

The company explains in its suit that the proposed merger would violate this act because it would lead to AT&T and Verizon controlling 75 percent of the wireless market, while taking in 90 percent of the profits.

War of words
"Sprint opposes AT&T's proposed takeover of T-Mobile," Susan Haller, vice president of litigation at Sprint, said in a statement.

"With today's legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal,” Haller added.

AN AT&T spokesman fired back, "This simply demonstrates what we've said all along: Sprint is more interested in protecting itself than it is in promoting competition that benefits consumers.”