Judge Oks Sprint’s Lawsuit Against AT&T

A judge in the U.S. on Wednesday gave the go ahead to parts of C Spire Wireless and Sprint Nextel’s lawsuits against AT&T’s proposed US$39 billion acquisition of T-Mobile USA.

AT&T and T-Mobile had moved for dismissal of the lawsuits arguing that the complaints by Sprint and C Spire, formerly Cellular South, failed to adequately substantiate that the merger would cause them “antitrust injury”.

The decision by District Judge Ellen Segal Huvelle of the United States District Court for the District of Columbia could complicate AT&T’s defense of the deal which has been already opposed by the U.S. government.

The U.S. Department of Justice filed a lawsuit in August to block AT&T from acquiring T-Mobile, saying that the deal would significantly reduce competition, increase prices and stifle innovation. Seven state attorneys general have joined the lawsuit. That case goes on trial in February before Judge Huvelle.

Where private plaintiffs have successfully pleaded antitrust injury, the fact that they are defendants’ competitors is no bar, Judge Huvelle said before allowing Sprint and C Spire to proceed with their claim that the merger would make it difficult for them to acquire wireless devices. The companies had claimed that after the merger AT&T and Verizon would be in a better position to get exclusive handset deals, while foreclosing their access to the most innovative handsets and raise their costs.

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