A group of state attorneys general are getting set to fight against the T-Mobile and Sprint merger in an unprecedented federal trial.
Sprint and T-Mobile announced the $26 billion deal last year. The all-stock deal has T-Mobile exchanging 9.75 Sprint shares for each T-Mobile share. T-Mobile parent Deutsche Telekom will own 42 percent of the combined company — which will be known as T-Mobile — and Sprint parent SoftBank Group will own 27 percent. The remaining 31 percent will be held by the public.
In October, the merger officially received enough votes to win approval by the Federal Communications Commission (FCC). But now this case, which begins on Monday (December 9) and includes 13 states and the District of Columbia, all led by Democratic AGs, is seeking to block it, arguing that the merger of two companies offering steep discounts could make cell phone plans more expensive.
Legal experts say it is unprecedented for the states to attempt to block a merger of this size, and a victory for the AGs could give states newfound power regarding antitrust enforcement when it comes to tech companies.
If the states prevail, “companies will have to take them more seriously,” New York University law professor Harry First said, according to The Wall Street Journal. “They’ll have to have really serious discussions with states like California and New York.”
“If we have another four years of the Trump administration, we may see more of this,” he added.
Judge Victor Marrero will be overseeing the case in federal court in New York, with the trial expected to last about three weeks. Various executives will testify, including T-Mobile boss John Legere, Sprint Chairman Marcelo Claure and Dish Network Corp. Chairman Charlie Ergen.
Last week a meeting to discuss an out-of-court settlement was canceled, but there is still the chance for both sides to reach a deal during the trial.