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Today the US Justice Department has sued to block AT&T’s acquisition of T-Mobile. Bloomberg reported that the government filed charges that the absorption of T-Mobile would violate antitrust laws. “AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market,” the document reads. This is a major blow for AT&T and a major benefit for consumers because AT&T buying T-Mobile would limit consumer choice in buying mobile phones and plans.
The T-Mobile buyout is valued at approximately $39 billion. If the government is able to block the deal, AT&T will still owe T-Mobile’s parent company Deutsche Telekom about $3 billion in cash. In all AT&T would have to spend as much as $7 billion. AT&T said that the merger would lower costs but looks like the merger would only let AT&T have the largest market share. The Justice Department may still conceivably be influenced into accepting the merger, but this would likely only happen after some negotiated concessions by AT&T.