A federal judge in Chicago last week said a lawsuit filed by customers of AT&T and Verizon over T-Mobile’s acquisition of Sprint may proceed because the plaintiffs “plausibly” argued that higher prices “flowed directly” from the $26 billion merger.
As Reuters reported, the proposed class action was filed last year and seeks a range of penalties, including undoing the merger of Sprint and T-Mobile. The class-action suit was filed by seven AT&T and Verizon subscribers on behalf of millions of customers who were affected. AT&T and Verizon are not directly involved in the suit.
In a 41-page ruling, U.S. District Judge Thomas Durkin said the merger eliminated the two “maverick” firms that were responsible for much of the price competition and innovation among the carriers. The judge noted that AT&T and Verizon increased their prices in the spring of 2022.
Fierce reached out to T-Mobile, which provided the following statement: “The Court’s decision is procedural, going only to the initial question whether these customers can bring the lawsuit. It says nothing about whether an antitrust violation has occurred. It’s clear that our merger with Sprint has enhanced competition, and delivered customers everything we said it would – more reliable connectivity, more value and more competition – and we’ll continue to defend its merits.”
T-Mobile’s lawyers argued in part that the suit doesn’t take into account the Covid-19 pandemic, which began in March 2020, but the judge said it’s far from obvious that Covid would have caused consumers to pay higher prices for wireless services.
“If Plaintiffs are unhappy with Verizon and AT&T, there is a remedy available in the highly competitive market that wireless consumers enjoy today – they should switch to T-Mobile, not sue it,” T-Mobile’s attorneys told the court.
T-Mobile completed its merger with Sprint in April 2020 after about two years of regulatory scrutiny. U.S. District Judge Victor Marrero ruled in February 2020 that T-Mobile and Sprint’s merger should be allowed after a coalition of 14 state attorneys general (AGs) sued to block the deal.
As part of merger-related concessions to secure government approval, Dish Network agreed to acquire certain Sprint spectrum and prepaid assets, including Boost Mobile, and enter the wireless market as a fourth national competitor.
In June, Dish announced that it met the FCC’s buildout requirement to offer 5G broadband service to over 70% of the U.S. population. However, its ability to attract customers isn’t going so well. Dish on Monday reported a loss of about 225,000 mobile subscribers in the third quarter on top of prior losses.
As of last year, T-Mobile had substantially decommissioned the entire Sprint network, a goal it achieved about a year ahead of schedule. The integration of Sprint’s 2.5 GHz spectrum was a key part of T-Mobile’s 5G strategy, which included launching 5G coverage nationwide and leapfrogging the competition in 5G.