WASHINGTON-GTE Corp. filed a private antitrust lawsuit at a U.S. federal district court here last week in an attempt to block the planned $38 billion merger of WorldCom Inc. and MCI Communications Corp.
The lawsuit alleges the merger would allow the combined company to monopolize the market for Internet backbone services because it would own 40 percent to 60 percent of the network that transmits and routes data for both users and service providers.
GTE also stated in its lawsuit that the merger would affect long-distance markets in that it would remove WorldCom, a key supplier of wholesale long distance, from the game and would reduce competition among long-distance resellers, like GTE.
GTE had placed a bid for MCI last fall but lost out to WorldCom.
“From the outset, GTE has strongly opposed this merger as highly anti-competitive,” said William Barr, executive vice president and general counsel of GTE. The company, and others, stated their opposition before the Federal Communications Commission, The U.S. Department of Justice and the European Commission, said GTE.
“Subsequent events have confirmed this position,” Barr continued. “Both the U.S. Department of Justice and the European Commission are in the midst of intensive investigation of this transaction, especially its impact on the Internet and the domestic and international long-distance markets. Indeed, the European Commission has recently issued a detailed Statement of Objections setting forth its opposition to the merger as anti-competitive.”
The EC announced last month it will hold hearings this week to compel WorldCom and MCI to answer the concerns listed in the Statement of Objections. Bell Atlantic Corp., BellSouth Corp., the Communications Workers of America, the AFL-CIO and several European companies have filed petitions against the proposed merger with the FCC as well.
