Chicago, IL – A federal judge has ruled that a major class action lawsuit brought against T-Mobile by AT&T and Verizon customers can move forward, in a decision that allows the consumers to pursue claims that T-Mobile’s acquisition of Sprint in 2020 illegally raised wireless service prices.
The lawsuit, filed in 2022 on behalf of potentially tens to hundreds of millions of AT&T and Verizon subscribers, alleges that T-Mobile’s $26 billion merger deal substantially lessened competition and enabled the company to raise prices. The consumers argue this resulted in billions of dollars in overcharges that “flowed directly” from the anticompetitive merger.
In a 41-page opinion issued on Thursday, U.S. District Judge Thomas Durkin stated that the plaintiffs had “plausibly” claimed the merger allowed T-Mobile to improperly raise prices. He wrote that the consumers would be allowed to proceed with their proposed class action against the wireless giant.
Judge Allows Sweeping Lawsuit to Test Merger’s Competitive Impact
The judge’s preliminary ruling does not address the underlying merits of the consumers’ allegations. However, it does permit the lawsuit to move to the discovery phase, during which both sides will access evidence. This will allow a fuller examination of the merger’s impact on competition and pricing in the U.S. wireless market.
According to legal experts, this initial decision opens the door for an in-depth evaluation of major allegations regarding the anticompetitive nature of the T-Mobile-Sprint deal. The consumers will now have the opportunity to obtain internal documents, executive communications, pricing data and economic analyses that could shed light on whether the merger allowed T-Mobile to improperly raise prices.
“This is a very significant development,” said David Balto, an antitrust attorney and former Federal Trade Commission official. “The court is allowing the plaintiffs to test the central premise that the T-Mobile merger substantially harmed competition.”
T-Mobile Called Lawsuit “Unprecedented” Prior to Ruling
The class action lawsuit was filed in 2022 by seven AT&T and Verizon subscribers in Illinois and Indiana. It sought various penalties against T-Mobile, including potentially breaking up the company’s acquisition of Sprint.
In court filings, attorneys for T-Mobile called the case “an unprecedented class action.” They asserted the plaintiffs’ claims about pricing effects were “speculative” and did not prove any overcharges relative to what prices would have been without the merger. T-Mobile attorneys told the court that unsatisfied customers could simply switch carriers in the highly competitive wireless market.
Judge Dismisses SoftBank as a Defendant
Judge Durkin dismissed Japanese technology company SoftBank, which was Sprint’s controlling shareholder, as a defendant in the case. However, T-Mobile and its parent company Deutsche Telekom will remain defendants as the lawsuit proceeds.
Neither AT&T nor Verizon are involved directly in the class action lawsuit, which is being litigated independently of any government enforcement action. The U.S. Department of Justice approved the merger in 2020 after T-Mobile agreed to divest certain assets to Dish Network.
Consumers’ attorneys applauded Judge Durkin’s ruling allowing the lawsuit to advance. T-Mobile did not have any immediate comment following the judge’s decision. The next phase of the case is expected to center on evidence gathering and determining whether the merger did illegally harm competition and raise prices.