The Justice Department’s rejection of AT&T’s proposed purchase of T-Mobile USA will test new federal guidelines on challenging mergers, as well as the companies’ resolve in forming the nation’s largest wireless carrier. Colleges, universities, and consumers, meanwhile, will be watching the battle to see how it plays out—and what the landscape for wireless service will be as a result.
The Justice Department on Aug. 31 took the unusual step of filing a lawsuit to try to block AT&T’s $39 billion purchase of T-Mobile USA, arguing that the proposed merger would lead to higher wireless prices, less innovation, and fewer choices for consumers.
The move comes as more schools are integrating into their instruction smart phones, tablets, and other devices that connect over a 3G or 4G wireless network.
A courtroom battle is likely and could wring out information that the companies would prefer to keep private. Still, AT&T Inc. has a big incentive to fight: If the deal is called off, the company has to pay a $3 billion breakup fee and surrender some of its unused spectrum for wireless communications.
AT&T is promising to fight the Justice Department’s decision, which could produce the biggest antitrust showdown since business software maker Oracle Corp. squared off with the federal government seven years ago. That dispute, triggered by the government’s decision to block Oracle’s proposed purchase of rival PeopleSoft Inc., exposed several well-kept corporate secrets and required Oracle CEO Larry Ellison to testify before a packed courtroom.
In the end, Oracle pulled off something few companies have done in the past 30 years: It persuaded a federal judge that the Justice Department didn’t have grounds to block its PeopleSoft deal. Oracle closed its $11.1 billion takeover four months after getting the favorable court ruling.
Usually, not even the most powerful companies bother to fight government regulators in an antitrust dispute. Google Inc., for example, backed off in 2008 when the Justice Department threatened to sue to block a proposed internet search partnership with Yahoo Inc. Microsoft Corp., the world’s largest software maker, pulled out of a deal to buy Intuit Corp. in 1995 after the Justice Department objected.
- Extron AV Switching, Streaming, and Control Systems Aid Higher Learning at Idaho’s First Medical School - June 1, 2021
- Extron XTP, Streaming, and Control Systems Empower Point Park University’s Varsity Esports Program - June 1, 2021
- Extron NAV Series Delivers AVoIP Throughout Allied Health Veterans Hall at UNC Wilmington - June 1, 2021