A federal judge allowed the third- and fourth-largest wireless carriers to merge into one company as T-Mobile takes over Sprint.
The merger between the two firms had already been approved by the Department of Justice and Federal Communications Commission when 13 state attorneys general filed a lawsuit to block the merger. The attorneys general, most of whom represent Democratically controlled states, argued that the merger would limit competition and lead to higher phone bills for consumers.
The two firms argued that a merger would allow them to compete with AT&T and Verizon, which are the two largest wireless communications firms in the United States. The acquisition deal between the two firms was listed at $26 billion.
New York Attorney General Letitia James disavowed the judge’s ruling, saying, “[We] disagree with this decision wholeheartedly, and will continue to fight the kind of consumer-harming megamergers our antitrust laws were designed to prevent.”
“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 added.
In his decision, Judge Victor Marrero explained, “The resulting stalemate leaves the Court lacking sufficiently impartial and objective ground on which to rely in basing a sound forecast of the likely competitive effects of a merger.”
The ruling also noted that Sprint was not a strong enough company to continue on its own, noting, “The Court is thus substantially persuaded that Sprint does not have a sustainable long-term competitive strategy and will in fact cease to be a truly national [mobile network operator].”
The merger must still be approved by the California Public Utilities Commission despite earning approval from a federal judge and two federal agencies.
