Dept. Of Justice Moves To Block AT&T Purchase Of T-Mobile

Though it’s been said since the beginning that AT&T’s proposed $39 billion purchase of T-Mobile USA would be an uphill climb, most people seemed to think it would ultimately still go through. But earlier today, lawyers for the federal government filed a lawsuit in federal court to block the merger, saying it would violate antitrust law and “substantially lessen competition.”

“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” reads the complaint.

The lawsuit doesn’t necessarily mean the end of the merger. AT&T can choose to fight the complaint and work with regulators to make the deal more palatable.

Parul P. Desai, policy counsel for Consumers Union, said of today’s developments:

This announcement is something for consumers to celebrate. We have consistently warned that eliminating T-Mobile as a low-cost option will raise prices, lower choices, and turn the cellular market into a duopoly controlled by AT&T and Verizon. The lawsuit filed by DOJ today proves that it has serious concerns and believes the best way to protect millions of consumers nationwide is by blocking the merger. We will continue to work with policy makers to ensure competition remains strong and in the best interest of consumers.

Proponents of the deal said it would significantly increase AT&T’s 4G network and bring wireless broadband access to millions in rural areas of the country that are currently under-served.

U.S. Files Antitrust Complaint to Block AT&T, T-Mobile Merger [Bloomberg]