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Federal judge approves merger of T-Mobile and Sprint, but states may appeal

  Sprint T-Mobile Combined for Merger Approved by Judge 2-11-20

A federal judge approved the merger of T-Mobile and Sprint Tuesday, ignoring complaints from 14 government agencies and consumer advocates that the merger will harm competition and result in higher prices.

The decision removes the last big stumbling block for the $26 billion merger, proposed more than a year ago.

On June 11, 2019, 13 states and Washington, D.C., filed a lawsuit to stop the deal from going through, saying the merger of two of the four national wireless carriers would harm consumers nationwide by reducing competition in the market and putting access to affordable, reliable wireless service at risk.

“Our fight to oppose this merger sends a strong message: even in the face of powerful opposition, we won’t hesitate to stand up for consumers who deserve choice and fair prices,” said California Attorney Xavier General Becerra. “We’ll stand on the side of competition over megamergers, every time. And our coalition is prepared to fight as long as necessary to protect innovation and competitive costs.”

T-Mobile and Sprint compete with each other on price, features, and quality. In April 2018, T-Mobile announced its third attempt to merge with a competitor. Tuesday’s court decision allowed the merger to move forward, reducing the market from four national mobile network operators – T-Mobile, Sprint, Verizon, and AT&T – to three. And, the merger of the two companies will eliminate T-Mobile’s low-cost competition.

Each previous merger attempt by the companies had been challenged or abandoned due to opposition from the federal government, but in July 2019, the U.S. Department of Justice approved the deal. The attorneys general, however, continued to have concerns about the merger.

New York Attorney General Letitia James said the Tuesday decision marks a loss for every American who relies on their cell phone for work, to care for a family member, and to communicate with friends.

“From the start, this merger has been about massive corporate profits over all else, and despite the companies’ false claims, this deal will endanger wireless subscribers where it hurts most: their wallets,” James said.

There’s no doubt that reducing the mobile market from four to three will be bad for consumers, bad for workers, and bad for innovation, which is why the states stepped up and led this lawsuit, she said.

“We disagree with this decision wholeheartedly, and will continue to fight the kind of consumer-harming megamergers our antitrust laws were designed to prevent,” James said.

She said the attorneys general will review their options, including a possible appeal.

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