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Court Rules Sprint Can Join AT&T Suit Court Rules Sprint Can Join AT&T Suit

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technology

Court Rules Sprint Can Join AT&T Suit

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Left, Randall L. Stephenson. President & CEO, AT&T, Philipp Humm, President & CEO, T-Mobile USA, at a hearing on their proposed merger earlier this year(Richard A. Bloom)

Sprint and C Spire will be allowed bring lawsuits against AT&T's proposed merger with T-Mobile, U.S. District Judge Ellen Huvelle said in an opinion issued Wednesday. 

The decision will permit the competitors to add their considerable resources and industry expertise to the Justice Department's court fight against the proposed $39 billion deal. The government says the merger will hurt competition. 

 

AT&T had sought to dismiss the competitors' suits, which could slow down the trial and delay the eventual merger outcome. 

Judge Huvelle, however, decided the C Spire and Sprint had overcome the high hurdle companies must scale to bring a suit on anitrust grounds. They had to demostrate in filings and in oral arguments that the merger would have anti-competitive effects that would harm their companies in particular. 

Huvelle said the companies had standing to sue based on their arguments that the merger would hurt their ability to gain access to the latest mobile devices. She also said C Spire had standing because the merger could hurt its ability to purchase roaming service.

 

"The plaintiffs’ complaints do state plausible claims that the proposed acquisition threatens them with loss and damage in the market for handsets generally," the opinion said.   

AT&T was encouraged that she did not accept all of the competitors' complaints. 

“We are pleased with the ruling that dismisses the vast majority of the claims of Sprint and CellSouth.  We believe the limited, minor claims they have left are entirely without merit,” said Wayne Watts, AT&T senior executive vice president and general counsel, in a statement. 

Sprint had claimed that the merger could harm to its ability to purchase wireless backhaul, the landline connections sold by AT&T and Verizon that are crucial to connecting mobile service. But the judge's opinion said the backhaul claim was too speculative. 

 

"Because its complaint leaves so much to conjecture, Sprint fails to adequately allege a threatened injury-in-fact in the backhaul market," the opinion read. 

The competitors saw the decision as a clear win. 

"We are pleased that the court has given us the chance to continue fighting to preserve competition on behalf of consumers and the wireless industry," Susan Haller, vice president for litigation at Sprint, said in a statement. 

C Spire also claimed a win. 

"The Court's ruling today will ensure that all parties harmed by AT&T's proposed takeover of T-Mobile will have the benefit of a fair hearing," said Eric Graham, vice president for strategic and government relations for C Spire.

Huvelle ordered a scheduling conference for the competitors' antitrust lawsuit for December 9.

The case is the first time in the history of modern antitrust law that companies are allowed to sue alongside the federal government in an antitrust case to block a merger. The Justice Department's trial was scheduled to begin in February.

The proposed merger would combine the second-largest wireless company with the fourth-biggest and crown AT&T the new market leader. 

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