Tuesday, October 25, 2011
"You don't stand in the shoes of the consumer or the Department of Justice," U.S. District Judge Ellen Segal Huvelle admonished Sprint Nextel Corp.'s (S) lawyers in court on Monday.
She rejected a bid by Sprint to gain access to documents that AT&T, Inc. (T) had submitted to the U.S. Department of Justice in an effort to get its $39B USD acquisition of Deutsche Telekom AG's (ETR:DTE) T-Mobile USA approved. The acquisition would give AT&T a virtual monopoly on 3G GSM technology in the U.S., which some argue is a big deal and others argue isn't a big deal.
AT&T is the nation's second largest carrier, while T-Mobile is the nation's fourth largest carrier. Sprint s currently in third place.
Sprint's request would have given it access to confidential documents that revealed details of T-Mobile and AT&T's internal business, details that Judge Huvelle opined would give the company unfair insight into its competitors. She states, "I don't see it as efficient or fair."
Lawyers are calling her decision a big victory for AT&T, as the company can now focus its attention primarily on defeating the DOJ's lawsuit in court. Bert Foer, head of the American Antitrust Institute, tells Reuters, "There are ways in which Sprint can be exceptionally helpful to the government agencies and I'm sure that they will continue to provide advice but with more access to documents they're likely to provide better advice."
In its plea to keep its lawsuit alive in some form, Sprint's lawyer Steven Sunshine reportedly invoked the company's recently acquired iPhone as an example of the kind of product that Sprint would be denied if the deal went through. He commented, "If this transaction goes forward, the plaintiffs will be impaired in their ability to compete." Sprint's lawsuit is viewed as unusual as U.S. antitrust law is supposed to protect consumers, rather than businesses (competitors). While complaints are commonplace in antitrust disputes, it's relatively rare for a competitor to file its own lawsuit to try to block a merger.
Judge Huvelle still has to decide whether to reject the Sprint case outright, as AT&T requested. She did not specify when she would make a ruling on AT&T's request.
The main show should be the DOJ trial, which begins on Feb. 13 after a couple months of pre-hearings. That trial will be presided over by Judge Huvelle without a jury. The DOJ will have at least six weeks to present its arguments, which will likely include that a merger would put upward pressure on service prices in the U.S. as T-Mobile currently offers some of the cheapest fully-functional service plans in the U.S.
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