Sprint Nextel Corp. v. AT&T Inc.

AT&T, Inc. (defendant), the second-largest mobile wireless carrier, sought to acquire T-Mobile USA, Inc. (T-Mobile), the fourth-largest carrier. Cellular South, a group of regional carriers, and Sprint Nextel Corp. (Sprint) (plaintiffs), the third-largest carrier in the country, sued AT&T under § 16 of the Clayton Act. Section 16 allows private parties that fear threatened loss or damage from an antitrust violation to seek injunctive relief. Sprint and Cellular South claimed that a merger between AT&T and T-Mobile would affect the market for wireless services by increasing AT&T’s market power, in turn leading to higher retail wireless prices. Sprint and Cellular South also argued that the merger would impair their businesses by limiting their access to innovative handsets, costing them customers. This, they claimed, was because the market for wireless devices often involved exclusivity deals between carriers and device manufacturers. They believed that AT&T’s increased market share would allow AT&T to enter into exclusive deals without properly competing for them. Both Sprint and Cellular South produced evidence showing that they had been denied opportunities to carry in-demand devices due to exclusivity deals between manufacturers and larger wireless carriers. Sprint could not carry iPhones for five years after their release due to deals Apple had made with AT&T and Verizon. Cellular South had been refused access to new device models and had been charged higher prices to carry older models. Due to their alleged injuries, Sprint and Cellular South sought to enjoin the merger. AT&T moved to dismiss the case, arguing that Sprint and Cellular South did not have standing to sue.