Tags: Obama | Antitrust | punish | Business | AT&T

Experts: Obama Using Antitrust Muscle to Punish Business

Thursday, 01 Sep 2011 01:40 PM

President Barack Obama promised early on to crack down on business dealings deemed threats to competition.

The problem, experts say, is that not too many deals have materialized since Obama took office, maybe due in part to his threats and regulatory policies.

So AT&T's announced takeover of T-Mobile, a $39 billion wireless telecom deal, was the perfect chance for the administration to strike.

The Department of Justice filed suit to block the deal on grounds that it could hike up rates.
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"We believe the combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower-quality products for their mobile wireless services," says James M. Cole, the deputy attorney general, according to the New York Times.

Not so, experts say.

obama200getty.jpg
President Barack Obama
(Getty Images photo)
It's just another attempt by the administration to overextend its regulatory reach in an effort to unfairly punish business for the recent recession.

"The DOJ lawsuit constitutes another attempt by the Obama administration to stifle economic growth through excessive government intervention and regulation," Americans for Tax Reform president Grover Norquist says in a statement.

The move will stifle investment, job creation and improvements to technology.

"This latest overreach continues the Obama administration’s attempt to control private enterprise by executive fiat."

Furthermore, the merger would not lead to higher prices, as the administration's lawsuit claims.

"The government’s own data show that over the past decade wireless bills were slashed in half, despite five major telecommunications mergers during that time," Norquist adds.

On top of that, 90 percent of Americans can still choose between an average of five or more mobile voice carriers, which refutes the argument that the deal would stamp out competition, Norquist says.

"Instead of political posturing and over-regulating, the federal government should focus on alleviating the regulatory burden that has stalled recovery and handcuffed entrepreneurship and job creation in the American economy."

Some see the move as an act on the Obama administration to step up plans made during his early days in office to enforce antitrust laws.

The problem is that not too many opportunities to do just that have arisen.

"This administration has been more aggressive in challenging mergers than the previous one," says Robert Bell, a partner at the law firm Kaye Scholer, the New York Times adds.

"Still, there have not been as many cases as people maybe had expected, based on what the administration had said in its early days."

In May, the Justice Department threatened to block Nasdaq OMX Group's proposed $11.3 billion bid for NYSE Euronext, which would have joined the two biggest stock exchanges in the U.S., and Nasdaq subsequently dropped its bid, The Wall Street Journal reports.

Other legal experts say AT&T and T-Mobile have little room to negotiate.

"The DOJ did not file this complaint to negotiate," says Dana Frix, a partner at Chadbourne & Parke LLP's Washington office, who isn’t representing anyone in the case, according to The Wall Street Journal.

"For future mergers, this complaint shows a tougher DOJ stance. They are sending a big message."

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President Barack Obama promised early on to crack down on business dealings deemed threats to competition. The problem, experts say, is that not too many deals have materialized since Obama took office, maybe due in part to his threats and regulatory policies. So AT T's...
Obama,Antitrust,punish,Business,AT&T
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Thursday, 01 Sep 2011 01:40 PM
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