Corporate money could help the government fight an antitrust battle for the first time, depending on the outcome of an argument in court next week.
AT&T and Sprint spent the month filing dueling legal briefs on whether corporate competitors can join the Justice Department's case against AT&T's proposed $39 billion merger with T-Mobile. A federal judge will hear oral arguments on Monday.
Sprint's suit could provide the Justice Department's lawyers all of the legal resources of a billionaire corporation and allow Sprint's lawyers to strategize with the government on everything from evidence to arguments.
That would be a first.
Never in the history of modern antitrust has a corporation joined the federal government in an antitrust battle, raising the question of how much corporate money can give the government an edge in its such battles.
Sprint, for its part, has tried to make this kind of effort seem old hat. It points to 13 cases during the modern antitrust era in which competitors filed suit on antitrust grounds.
But of the six cases in which the companies actually were permitted to sue, none involved a corporation entering a federal government suit. Largely small regional suits in comparison with the markets in play in the AT&T merger, some of the cases didn't even involve government regulators; rather, they originated when one company decided to sue another one.
Those cases could be of huge significance in determining whether Sprint has standing to sue. But their dissimilarity to this situation underscores that Sprint would be forging a new kind of alliance here.
It's no wonder, then, that the Justice Department seems conflicted on the request by Sprint and C Spire Wireless (formerly Cellular South) to join its case. Originally, Justice said it was completely neutral on the competitors jumping into the fray. But as October's comment cycle wore on, the department seemed to change its tune, arguing that Sprint should be allowed to at least participate in pretrial processes.
Sprint, from the start, has emphasized its "resources" in explaining its suit. "With today's legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal," said Susan Haller, vice president of litigation at Sprint, when the lawsuit was filed.
Judge Ellen Huvelle could decide on the Sprint/C Spire question during Oct. 24 oral arguments on this issue, but she has discretion to make the decision when she chooses. The Justice Department sued to block the merger in August. AT&T has asked the court to block the suit.
AT&T's proposed purchase of T-Mobile would reduce the number of national wireless companies from four to three. It would also concentrate 80 percent of the market in the hands of Verizon and AT&T and crown AT&T the new market leader.
The Justice Department says that such concentration would damage competition and hurt consumers. But the company argues that fierce competition from regional wireless companies makes the wireless market more competitive than ever and that it would remain so after the merger.
Want to stay ahead of the curve? Sign up for National Journal's AM & PM Must Reads. News and analysis to ensure you don't miss a thing. fmlht111025
Sprint's Bid to Join AT&T Suit Offers Unique Alliance
Gianni Versace suit white Armani suit best value suits 80's fashion for men