T-Mobile Faces Legal Hurdle as Judge Allows Lawsuit Over Sprint Merger to Proceed

In a recent development, a Chicago federal judge has given the green light for a proposed class-action lawsuit against T-Mobile, asserting that AT&T and Verizon customers may proceed with their claims. Seven AT&T and Verizon customers filed a lawsuit last year seeking to invalidate the Sprint-T-Mobile merger due to worries about increased prices as a result of the $26 billion transaction.

U.S. District Judge Thomas Durkin, in a 41-page order, acknowledged the plaintiffs' argument that the merger eliminated the two "maverick" enterprises, Sprint and T-Mobile, that were known for driving carrier price competition and innovation. Notably, the judge pointed out that AT&T and Verizon had raised prices in April 2022, further supporting the plaintiffs' claims.

Become a Subscriber

Please purchase a subscription to continue reading this article.

Subscribe Now

T-Mobile responded to the decision, emphasizing that it is a procedural step and does not indicate any antitrust violations. The company reiterated its commitment to defending the merger with Sprint, emphasizing the benefits it has brought to consumers, including enhanced connectivity, competitive pricing, and increased competition.

T-Mobile's legal team argued that the lawsuit failed to consider the impact of the March 2020 COVID-19 epidemic. However, Judge Durkin dismissed this argument, stating that it is unlikely consumers would have willingly paid higher wireless service fees due to the pandemic.

In defense of T-Mobile, the company's attorneys suggested a straightforward remedy for dissatisfied customers: to switch to T-Mobile, emphasizing the highly competitive nature of the wireless market.

The merger between T-Mobile and Sprint was completed in April 2020 after undergoing a two-year regulatory review. U.S. District Judge Victor Marrero approved the merger in February 2020, despite opposition from 14 state attorneys general who sought to halt the consolidation. As part of the merger concessions to secure government approval, Dish Network acquired Sprint's spectrum and prepaid assets, including Boost Mobile, aiming to become a fourth national cellular competitor.

While Dish Network met the FCC's buildout requirement for 5G broadband coverage exceeding 70% of the U.S. in June, it has struggled to attract customers. In a recent announcement, Dish reported a third-quarter loss of 225,000 mobile users, adding to its previous losses.

The legal proceedings highlight the ongoing challenges and controversies surrounding the T-Mobile-Sprint merger, with the court allowing the lawsuit to proceed as consumers express concerns over the impact on pricing and competition in the wireless market.