I agree with the student’s observation on AT&T’s failed bid to acquire Mobile-T which was the fourth largest telecom company in the United States at the time. The merger would have ensured AT&T’s dominance in the American market and would have pushed Verizon to second place. However, it was clearly violating the Sherman Act in attempting to monopolize the telecom industry. The Sherman act also outlaws the intent to monopolize the market with criminal penalties. Section 1 of the Sherman Act prohibits the formation of a trust with domestic and foreign companies. In addition, it the proposed merger violated section 7a of the Clayton Act. The proposed merger would have virtually wiped out one of the more significant competitors from the market.
Response 2
I would partially agree to student’s response and state that the AT&T bid to merge with Mobile-T was in violation of the Sherman Antitrust Law and with section 7a of Clayton Act that the proposed merger violated. However, the Section 7 of Clayton Act violation that the student has mentioned does not apply to this situation. Section 7 would be applicable only in a scenario where a company attempts to procure significant volumes of stock to render the competition ineffective. Although AT&A sought to monopolize the market with the merger, they were looking for the complete dissolving of T-Mobile from the market and replacing T-Mobile’s brand with their own. Hence, it is not a case of rendering T-Mobile ineffective or allowing T-Mobile to continue business under their brand while AT&T controlled all the decisions to allow the monopolization of the American Telecom market. Hence, I would disagree with the student’s views of a possible Section 7 violation for the failed AT&T and T-Mobile merger.
References
De La Merced, Michael J. (2011). AT&T Ends $39 Billion Bid for T-Mobile. Retrieved from: http://dealbook.nytimes.com/2011/12/19/att-withdraws-39-bid-for-t-mobile/?_r=0
Moritz, Scott, Rahn, Cornelius and Elstrom, Peter (2011). AT&T Pulls $39 Billion T-Mobile Bid on Regulatory Opposition. Retrieved from: http://www.bloomberg.com/news/articles/2011-12-19/at-t-pulls-39-billion-t-mobile-bid-after-regulator-opposition
