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AT & T Case Summary

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In 2011, AT&T and T-Mobile was on the verge of a merger. T-Mobile was reeling from some short-term losses, and the merger looked promising. AT&T is America’s second largest wireless telecom company and remained poised to overtake Verizon as the leader in the industry. However, neither company anticipated a lawsuit from the Department of Justice. The suit pressurized AT&T to pull out from the merger. The Department of Justice alleged that AT&T’s proposed merger with T-Mobile will create a monopoly in the wireless telecom industry; explicitly citing antitrust violations (Moritz, Rahn, and Elstrom, 2011). The Federal Trade Commission exists to ensure that there is fair opportunity for companies to trade competitively. The Government’s intention relied on creating multiple sources for a certain service to allow end-users affordable pricing. If there is only one supplier, the consumers will be subject to unreasonable pricing by the trader. Hence, antitrust laws were implemented (Department of Justice, 2015). …show more content…

They are the Sherman Antitrust Act of 1890 - Restricts certain industries from operating without competition, the Clayton Antitrust Act of 1914 – Outlaws' monopolies that affect consumers, and the FTC Act of 1914 – Outlaws outlandish practices that affect trade (Federal Trade Commission, 2015). Let us analyze how AT&T fits into violating antitrust laws in the proposed merger (that eventually failed) with T-Mobile. The wireless telecommunications market share in 2014 exhibits Verizon and AT&T holding 34% each. The leaders are followed by Sprint at a distant 16% and T-Mobile at 15%. In all, these four companies hold 99% of the market share in this industry (Trefis Team, 2014). There are a few lesser-known players such as US Cellular, CSpire, Cincinnati Bell and Ntelos who share the remaining 1%. The proposed merger would have put AT&T at the top of the table with 49% of the market

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