Case Study : At & T And T Mobile Merger

791 Words Oct 2nd, 2015 4 Pages
Case: AT&T and T-Mobile Merger

• Question 4 :
Should the merger be approved?

The AT&T and T-Mobile merger should not be approved, as the merger may cause more harm than benefits to consumers and for the related market. A horizontal practice is one that involves mergers and activities in the same industry. A horizontal merger comes under Section 7 of Clayton Act and under Section 2 of Sherman Act, as it would create a monopoly. As AT&T and T-Mobile both operates in same industry, the merger is clearly horizontal. The concern with horizontal arrangements is that it may increase market power, leading to lessened competition and higher prices. Many of interest groups(like other companies like SprintNextel, the Competitive Carriers Association, Cellular South, Leap Wireless, MetroPCS, Computer and Communications Industry Association, Yankee Group, group of seven NGOs including Consumer unions , National Hispanic Media Coalition, Future of Music Coalition, etc.) opposed. Most of them expressed concerns that the merger will stifle the competition, may result in increased prices for consumers, will reduce innovation and technological progress in the field, and it will leave with fewer options for consumers to shop around for cell phone plans. The decrease in consumer choice happens as the merger will reduce the number of mobile wireless carrier who has decent nationwide coverage. Consumers Union stated that there is great deal of data and evidence that this transaction will lead…
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