Momentum Grows for States’ Lawsuit with Addition of 15th AG
New York Attorney General Letitia James today announced that the State of Texas has agreed to join the multistate lawsuit blocking the anticompetitive megamerger of telecommunications giants T-Mobile and Sprint.
“We welcome Texas’s resolve to block this anticompetitive merger, and are pleased to announce that Attorney General Ken Paxton will assume a key leadership role in this case, along with Attorney General Becerra and myself,” said New York Attorney General Letitia James. “Along with 14 other Attorneys General from across the nation, we are more confident than ever that enforcing our antitrust laws — as they were meant to be enforced — is the best way to protect competition in the mobile marketplace. Whether Americans reside in big states or in small, in rural areas or in urban centers, on the coasts or in the heartland, it is clear that this merger is bad for consumers, bad for workers, and bad for innovation, and our growing momentum clearly continues to make that point.”
“While we appreciate the time and effort that went into the agreement between the parties and the U.S. Department of Justice, the Texas Attorney General has an independent obligation to protect Texas consumers. After careful evaluation of the proposed merger and the settlement, we do not anticipate that the proposed new entrant will replace the competitive role of Sprint anytime soon,” said Texas Attorney General Ken Paxton. “It is the Attorney General’s responsibility to preserve free market competition, which has proven to result in lower prices and better quality for consumers. The bargain struck by the U.S. Department of Justice is not in the best interest of working Texans, who need affordable mobile wireless telecommunication services that are fit to match the speed and technological innovation demands of Texas’ growing economy.”
Texas Attorney General Ken Paxton will become the 15th Attorney General to challenge the merger of T-Mobile and Sprint, adding to the momentum initiated by Attorney General James and the Attorneys General of California, Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, Virginia, Wisconsin, and the District of Columbia.
Last week, following news of a proposed deal between the U.S. Department of Justice and T-Mobile/Sprint, the states involved in the lawsuit expressed serious concerns about whether the deal with satellite TV operator DISH would create a fourth independent competitor that could replace the competition otherwise lost as a result of this megamerger. The states also expressed concerns about intrusive government market intervention, with federal regulators appearing to pick winners and losers rather than enforcing antitrust laws.
The Office of the Texas Attorney General has been a leader on antitrust issues, with a deep and experienced group of antitrust litigators. Additionally, Texas’ many dense urban centers, large rural areas, and key innovative industries would face many of the same potential issues as the other litigating states, including New York, if the merger of T-Mobile and Sprint were to be finalized.
T-Mobile US Inc. and Sprint Corporation are the third and fourth largest mobile wireless networks in the U.S., and are the lower-cost carriers among the “Big Four” — Verizon Wireless and AT&T round out the market. Intense competition, spurred in particular by T-Mobile and Sprint, has meant declining prices, increased coverage, and better quality for all mobile phone subscribers.
T-Mobile currently has more than 79 million subscribers, and is a majority-owned subsidiary of Deutsche Telekom AG. Sprint currently has more than 54 million subscribers, and is a majority-owned subsidiary of SoftBank Group Corp.
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