Please read each passage below, I need a few sentences in response to each part. Please use at least one source. Please cite the reference(s) properly. Part 1 and 2 can be on the same word document, however, please keep them separate by labeling them.
The proposed AT&T merger with T-Mobile would have not violated antitrust laws even if it poses a high possibility of monopolizing mobile services. Around 2011, AT&T was the leading provider of mobile services with T-Mobile not far behind. Combining AT&T’s 100.7 million subscribers to T-Mobile’s 33.7 million customers would create high leverage in the mobile service world. (Moritz, 2011). This would affect customers who live in rural low reception receiving areas and those who don’t earn as much income. On a technicality, the merger would not be considered a monopoly due to the definition that illegal anti-competitive acts qualify as a one. (Seaquist, 2012). However, the merger could unfavorably manipulate customer and supplier contracts activities People enjoy options and more for their money. Many would see T-Mobile as a competitor and a driving force of innovation to better sell products and plans to customers It could branch out worldwide and create greater connectivity to persons globally as well as boost market shares. Unfortunately, the Department of Justice deemed the merger a monopoly consequently canceling it.
Moritz, S. (2011, Dec 19). AT&T pulls $39 billion T-Mobile bid. Desert News. AT&T pulls $39 billion T-Mobile bid – Deseret News (Links to an external site.)
Seaquist, G. (2012). Business law for managers. Zovio.
If AT&T had merged with T-Mobile, would the merger have violated antitrust laws? Why, or why not?
If the merger between AT&T and T-Mobile had been approved, it would have violated antitrust laws. This is because it would have manipulated the prices by owning the entire wireless market. “The federal government that regulates anticompetitive practices that can impact interstate commerce” (Seaquist, 2012). Some types of agreements are so detrimental to free competition that they are considered per se violations of the Sherman Antitrust Act. Another area where this can be found is in the Clayton Act. Section 7A of the Clayton Act requires merger applicants to give antitrust regulators and the Department of Justice information about their proposed acquisition. Antitrust laws were created to create a competitive environment for consumers and businesses in the same market. If the merger between AT&T and T-Mobile had happened, consumers would have faced higher prices and less innovation.
Do not be unduly influenced by the Justice Department’s stance on the issue. Use your own analysis to reach a conclusion.
Using my analysis, I would also say that this is a tricky situation. The merger would create a lack of significant carriers, which could cause prices to rise significantly, which is detrimental to the customers and the industry as a whole. Therefore, I believe that you don’t want to create an unfair market, but at the same time, you don’t want to limit a company and create a monopoly.
Seaquist, G. (2012). BUSINESS LAW FOR MANAGERS. https://content.uagc.edu