In another added wrinkle in a building saga, AT&T customers are now trying to legally block the company’s widely-maligned attempted merger with T-Mobile. New York-based law firm Bursor & Fisher is representing a small group of customers in an attempt to demand arbitration from AT&T.
Bursor & Fisher claims the deal would violate the Clayton Antitrust Act and would result in less competition in the wireless market. The firm’s argument is that the merger would drive up prices for consumers while relieving the need for quality customer service. Therefore, the customers represented by the firm are requesting the purchase be blocked. Barring that, they request legally-imposed requirements placed on the terms of the acquisition, which would include the court divesting AT&T of wireless spectrum and blocking the wireless provider’s practice of signing exclusive contracts with handset producers.
The merger has already been under fire from members of Congress, including Senator Herb Kohl, the chairman of the Senate Antitrust Subcommittee. Kohl wrote a letter to the Department of Justice and the Federal Communications Commission expressing his ambivalence towards the proposed merger, saying “this acquisition … would likely cause substantial harm to competition and consumers, would be contrary to antitrust law … [and] should be blocked by your agencies.”
Three other House representatives also spoke out against the merger, although none of them so explicitly asked regulatory agencies to actually block it. Kohl, however, does have the distinct advantage of not being up for re-election, and as such can pretty much say whatever he thinks. It’s pretty clear he thinks the deal is pure hogwash.
Both the DOJ and FCC are already reviewing the acquisition, although it will likely take a year for the agencies to complete their assessment. In the mean time, Bursor & Fisher is expecting to files hundreds of arbitration cases on the behalf of its clients. AT&T’s contract prohibit customers from suing the company directly or through class-action, a clause the U.S. Supreme Court declared legal in April. Although customers are allowed to file through arbitration, they are still barred from class-action suits, hence Bursor & Fisher filing possibly hundreds of individual claims. Each claim must be reviewed individually, which will be done by judges at courts all over the country.
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