Sprint suit against AT&T/T-Mobile deal allowed

A judge in the U.S. on Wednesday allowed parts of C Spire Wireless and Sprint Nextel’s lawsuits against AT&T’s proposed $39 billion acquisition of T-Mobile USA.

AT&T and T-Mobile had moved for dismissal of the lawsuits arguing that the complaints by Sprint and C Spire, formerly Cellular South, failed to adequately allege that the merger would cause them “antitrust injury”.

The decision by District Judge Ellen Segal Huvelle of the United States District Court for the District of Columbia could complicate AT&T’s defense of the deal which has been already opposed by the U.S. government.

The U.S. Department of Justice filed a lawsuit in August to block AT&T from acquiring T-Mobile, saying that the deal would significantly reduce competition, increase prices and stifle innovation. Seven state attorneys general have joined the lawsuit. That case goes on trial in February before Judge Huvelle.

Where private plaintiffs have successfully pleaded antitrust injury, the fact that they are defendants’ competitors is no bar, Judge Huvelle said before allowing Sprint and C Spire to proceed with their claim that the merger would make it difficult for them to acquire wireless devices. The companies had claimed that after the merger AT&T and Verizon would be in a better position to get exclusive handset deals, while foreclosing their access to the most innovative handsets and raise their costs.

The Judge also allowed C Spire to proceed with its complaint that the merger would have implications on the market for roaming services. As roaming is a necessary input for C Spire, its concern that the removal of T-Mobile from the marketplace would leave only AT&T as a potential GSM roaming partner might be enough to demonstrate its antitrust standing, Judge Huvelle said.

The court has ensured that it receives a fair hearing, Sprint said in a statement after Judge Huvelle’s decision. C Spire said it was pleased to get the opportunity to continue its fight for American consumers, and for the principles of competition and innovation that should drive the wireless industry. AT&T and T-Mobile could not be immediately reached for comment.

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