If you followed the rumblings of the US wireless industry at any point between the years 2018 and 2020, you probably remember how much legal scrutiny the mega-combination of T-Mobile and Sprint faced. Ultimately, all seemed to end well for the nation’s third and fourth-largest mobile network operators, which were allowed to become one despite the strong opposition of market rivals, analysts, and even many lawmakers across the country.
Although a lot of time has passed since the $26 billion merger closed, the vast majority of the deal’s critics appear to maintain their position that the creation of a new and stronger T-Mobile was bad for American consumers, an opinion that’s now supported by a number of independent reports.
No end in sight for T-Mo’s court battles
In addition to incessant public scrutiny, Magenta is once again facing legal troubles, this time from a somewhat unlikely source. As we first reported around six months ago, a group of Verizon and AT&T subscribers (of all people) are seeking financial compensation for the higher prices their carriers charged them as a consequence of shrinking market competition.
Of course, T-Mo has merely lost a battle here in a legal war that could go on for years and years, as the plaintiffs’ attorneys are not only asking for potentially tens of millions of consumers to receive a cut of a compensation possibly worth billions of dollars, but for the very 2020-sealed merger to be unsealed.
Did prices really go up in the last few years?
What this lawsuit has and all those pre-merger legal proceedings lacked for obvious reasons is clarity over what was initially the contentious matter of price fluctuations. There’s simply no denying that US mobile data costs on the whole have risen since 2020, but what lawyers may have a tricky time proving is that these price hikes are entirely (or at least primarily) T-Mobile‘s fault.
It’s important to point out that Verizon and AT&T are not actually involved in this legal case in any official fashion because, well, that would mean they’d have to admit to some pretty mischievous practices of their own. After all, no one forced T-Mo’s competitors to jack up their prices either before or after Sprint disappeared and thus industry competition shrank.
Back in November 2023, mind you, Illinois Judge Thomas M. Durkin concluded in
a 41-page court document that the plaintiffs representing a proposed class of AT&T and
Verizon customers “plausibly alleged that their injuries flowed directly from the merger”, showing “
how the merger reduced competition in the retail mobile wireless market and as a result, market participants AT&T and
Verizon charged higher prices than they would have otherwise.”
That’s a pretty damning (preliminary) court finding that a jury will have to agree on for T-Mobile to be financially penalized, but that’s certainly serious enough to send shivers down the spines of many of the “Un-carrier’s” top executives. T-Mobile is still also facing scrutiny over thousands of job cuts made after the completion of its Sprint merger (and countless promises that won’t happen), as well as various advertising shenanigans both Verizon and AT&T are also accused of employing to misrepresent their products and services.