T-Mobile must face private antitrust lawsuit over $26 bln Sprint deal - US judge

Credit: REUTERS/Mike Blake

By Mike Scarcella

Nov 3 (Reuters) - A federal judge in Chicago has ordered T-Mobile US TMUS.O to face a lawsuit from AT&T T.N and Verizon VZ.N subscribers who claim the mobile communication giant's deal for rival Sprint hurt competition and caused them to pay billions of dollars more for wireless service.

U.S. District Judge Thomas Durkin in a 41-page ruling on Thursday said the plaintiffs "plausibly" argued that higher prices "flowed directly" from the $26 billion merger.

The proposed class action on behalf of tens to hundreds of millions of consumers was filed last year and seeks a range of penalties, including undoing the 2020 T-Mobile-Sprint merger.

Durkin's ruling was not on the merits of the claims, which now will be tested as the case advances. The court's decision also trimmed the lawsuit, knocking out Japan's SoftBank 9984.T, Sprint's controlling shareholder, as a defendant.

A representative for T-Mobile had no immediate comment on Friday, and SoftBank did not immediately respond to a request for comment. Both companies have denied any wrongdoing.

An attorney for the plaintiffs, Brendan Glackin, said they were grateful for the court's "well-considered order" and eager to move ahead with the case.

Federal antitrust law allows consumers, small businesses and others to pursue private challenges to mergers or acquisitions. The cases are litigated apart from government enforcement actions.

A group of states also sued over the T-Mobile-Sprint deal, but a Manhattan federal judge in 2020 ruled against them and cleared a path for the deal. The U.S. Justice Department was not a part of that lawsuit but reached a settlement with the merged company requiring it to divest some assets to satellite operator DISH Network.

The consumers' proposed class action lawsuit in Chicago was filed by seven AT&T or Verizon subscribers in Illinois and Indiana. They called the T-Mobile-Sprint tie-up "one of the most anti-competitive acquisitions in history."

AT&T and Verizon are not involved in the case. AT&T declined to comment on Friday, and Verizon did not immediately respond to a request for comment.

Attorneys for T-Mobile called the lawsuit "unprecedented," and said the plaintiffs' damages were "speculative."

"If plaintiffs are unhappy with Verizon and AT&T, there is a remedy available in the highly competitive market that wireless consumers enjoy today — they should switch to T-Mobile, not sue it," attorneys for T-Mobile told the court.

The case is Anthony Dale et al v. Deutsche Telekom AG et al, U.S. District Court for the Northern District of Illinois, No. 1:22-cv-03189.

(Reporting by Mike Scarcella)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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