T-Mobile’s legal team reportedly called the class action suit ‘unprecedented and speculative’
T-Mobile US has been hit with an antitrust lawsuit related to its 2020 acquisition of Sprint after a U.S. judge ruled in favor of a class action filed by AT&T and Verizon subscribers that argued the deal hurt competition and led to increased prices.
The suit was filed by seven AT&T or Verizon subscribers on behalf of millions of consumers. AT&T and Verizon are not directly involved in the case.
In the official ruling, U.S. District Judge Thomas Durkin stated that the plaintiffs “plausibly allege that their injuries flowed directly from the merger.” He said further that they have so far demonstrated plausibility that the $26 billion merger “reduced competition in the retail mobile wireless market and as a result, market participants AT&T and Verizon charged higher prices than they would have otherwise.”
The T-Mobile/Sprint merger has faced opposition before, with several states suing in federal court to block the deal before it became official. Initially filed by attorney generals in Colorado, California, New York, Wisconsin, Maryland, Mississippi, Michigan, Connecticut, Virginia and the District of Columbia, others soon joined the cause. In their filing, the attorneys general argued that the merger will harm competition and that “preserving vigorous competition for mobile wireless telecommunications services is essential to ensure continued innovation and low prices for American consumers.”
During merger discussions, T-Mobile US made various commitments related to competition, pricing and the job market. However, keeping those promises appears to be easier said than done. This summer, for instance, the carrier announced plans to cut 5,000 jobs, or about 7% of its workforce, despite former-CEO John Legere’s insistence that the Sprint merger would more jobs.
“[L]et me be really clear on this increasingly important topic. This merger is all about creating new, high-quality, high-paying jobs, and the New T-Mobile will be jobs-positive from Day One and every day thereafter. That’s not just a promise. That’s not just a commitment. It’s a fact,” he wrote in a 2019 blog post.
T-Mobile’s legal team reportedly called the class action suit “unprecedented and speculative,” commenting that if subscribers of its rivals are dissatisfied, they should just “switch to T-Mobile, not sue it.”
