from the merge-ALL-the-things! dept
We just got done noting how pretty much all of the criticism of the Sprint T-Mobile merger by economists and consumer advocates wound up being true. The deal has resulted in more than 10,000+ eliminated jobs, steady price hikes, annoying new fees, a weaker T-Mobile brand, and a lower quality product overall. It also clearly distracted T-Mobile from competent network security.
T-Mobile’s reddit forums are filled with employees saying the disruptive spirit of the company has been dead since the merger. T-Mobile customers are annoyed by endless new restrictions and price hikes.
But Verizon and AT&T customers are also pissed, and are part of a new lawsuit against T-Mobile arguing that the merger raised prices for everybody due to the reduction in overall wireless market competition. A federal judge in Chicago last week ruled that plaintiffs made some decent points and the lawsuit should be allowed to proceed:
“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 important time to protect consumers is before these kinds of competition-eroding deals are approved, but that very clearly didn’t happen here. Trump regulators at the FCC didn’t even bother to read about the deal’s impact before approving it. Trump “antitrust enforcers” at the FTC actively helped T-Mobile avoid regulatory scrutiny on their personal time, you know, like antitrust enforcers do.
T-Mobile’s response to the lawsuit was expected: to deny everything and insist the U.S. wireless sector is secretly super competitive:
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 harms of mindless consolidation are not theoretical. They’re clearly documented. Yet we’re dedicated to ignoring those harms because such consolidation is hugely profitable for a handful of over-compensated executives and a few key investors (sometimes). Rinse, wash, repeat, with nobody responsible for the end result getting within a thousand miles of introspection or accountability.
I’d not expect much from the suit in terms of reform. Any payout will be a tiny fraction of the financial harm caused. The real fix lies in more stringent merger review and well funded and staffed regulators; concepts defenders of a broken but profitable status quo have no real interest in.