Opponents of the pending US$39 billion merger between wireless carriers AT&T and T-Mobile are taking legal action with New York-based law firm Bursor & Fisher in a bid to block the deal.
Eleven arbitration cases have been filed on behalf of AT&T customers, and the law firm hopes more angry consumers will jump on board with its “Fight the Merger” initiative, which invites anti-merger consumers to join the fight against what critics say would be a duopoly should the companies be allowed to consummate the deal.
“AT&T’s $39 billion takeover of T-Mobile would turn back the clock to the era of the Ma Bell monopoly,” reads a description on Bursor & Fisher’s Fight the Merger website.
The pending merger, which was announced in March but is still in the discussion phase while it awaits negotiations and approval, has received harsh criticism from opponents. Consumer advocacy groups and wireless providers, most notably Sprint, have warned the arrangement would lead to higher prices, poor service and an overall stifling of competition.
AT&T, of course, sees the merger in a different light. In its filing with the FCC that introduces the acquisition plans, the company argues that it faces network and capacity constraints and the acquisition would lead to more complete coverage.
Smaller wireless providers, communication advocacy groups and tech giants Microsoft and Facebook came out in public support of the merger. The move surprised some at first glance, but the companies argued alongside AT&T that fuller, uninterrupted coverage really would lead to greater innovation for engineers, developers and adapters of their app-heavy devices and business models.
Consumer Day in Court
AT&T declined further comment to the E-Commerce Times, and it did not respond publicly to the Fight the Merger initiative. However the carrier has said before the arbitration cases won’t have the authority to block the merger as it goes forward.
Should consumers jump on board with Fight the Merger anyway, each of their arbitration cases via the Clayton Antitrust Act will have to be filed individually, since the AT&T contract prohibits users from raising a class-action suit against the company.
A provision in the Antitrust Act forbids mergers that “may substantially lessen competition or tend to create a monopoly,” though in reality it’s not always that cut and dry.
“The difficulty is that the interpretations of the statute by the courts have tended to require very specific proof that competition in a geographic area is eliminated,” Peter Carstensen, professor of law at the University of Wisconsin in Madison and an antitrust expert, told the E-Commerce Times.
With the widespread use of cellphones and the availability of local providers, it will be difficult to decide who gets their day in court. In addition, as with most lawsuits in the tech sector, rapidly changing environments and a lack of precedents make cases even more difficult to arbitrate.
Not Worth Fighting Now?
With the difficulty in determining arbitration, questions have been raised as to whether it’s even worth launching a legal campaign now, especially since the details of the merger haven’t come through yet. In one way or another, before the deal is finalized, the government will step in to determine whether the acquisition is acceptable.
“I think the bottom line is that in the end, the government is going to require AT&T to make certain concessions, maybe giving away territories, some oversight, or it could be a lot of different things which would be essentially consumer protections,” Joe Bonner, analyst at Argus Research, told the E-Commerce Times.
It could be considered a waste of resources to bring a legal fight forward before customers are certain this is an anti-consumer deal. Until a more clear set of parameters and concessions are known, it may be a non-issue.
“The fact that I’m not paying attention to it, of all the 900 things I think about, means it’s just not on my radar screen,” Peter Rhamey, analyst at BMO Capital Markets told the E-Commerce Times.
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