If AT&T had merged with T-Mobile, would the merger have violated antitrust laws? Why or why not?

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thanatassa | College Teacher | (Level 3) Educator Emeritus

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According to the Federal Trade Commission, there are three Acts of the United States Congress which are relevant to this issue: the Sherman Act (1890), which was intended to preserve competition and prevent cartels; the Federal Trade Commission Act, intended to create an agency (the FTC) to oversee such trade issues (1914); and the Clayton Act (1914), intended, inter alia, to prevent monopolies created by mergers and acquisitions. 

Although a merger between AT&T and T-Mobile would not have violated the Sherman Act, regulators would have closely scrutinized whether it would lead to the sort of monopoly discouraged by the Clayton Act.

The top four companies currently providing mobile services in the United States, Verizon Communications, AT&T, Sprint, and T-Mobile together control some 95 percent of the mobile market, with Verizon and AT&T together amounting to over an 80 percent market share. When the two smaller carriers, Sprint and T-Mobile, started discussing a merger, the FTC and Department of Justice both indicated that such a merger might run afoul of anti-competition rules. A merger between AT&T and T-Mobile would have an even more dramatic effect on reducing competition, moving the market even further toward a duopoly. Thus the FTC might well have considered such a merger in violation of the Clayton Act.

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