CTIA Amicus Brief Backs Interlocutory Appeal in T-Mobile/Sprint Antitrust Case

U.S. District Judge Thomas Durkin for Northern Illinois in Chicago should certify for interlocutory appeal his Nov. 2 order denying T-Mobile’s motion to dismiss the complaint brought by seven AT&T and Verizon customers who seek to vacate T-Mobile’s 2020 Sprint buy on antitrust grounds (see 2311290042), CTIA said in an amicus brief Monday (docket 1:22-cv-03189) in support of T-Mobile’s motion to certify.

Certifying the Nov. 2 order would afford the 7th U.S. Circuit Court of Appeals “an opportunity to resolve case-dispositive legal questions concerning consumer standing in antitrust litigation that have critical importance to the wireless industry,” said CTIA’s brief. The plaintiffs “posit a speculative and implausible theory of causation” under which T-Mobile/Sprint “somehow caused” AT&T and Verizon “to allegedly raise their prices,” said CTIA.

The plaintiffs’ theory “is all the more implausible against the backdrop of the robust competition that characterizes the market for wireless services in the wake of the merger,” said CTIA’s brief. “Empirical data show that competition has remained intense following the merger,” it said. Contrary to the plaintiffs’ “conclusory allegations,” the merger didn’t result “in increased costs to consumers,” it said.

Following the merger of T-Mobile and Sprint in 2020, competition among AT&T, Verizon and T-Mobile “has become stronger than ever,” said CTIA’s brief. A “simple comparison” between the prices of wireless services and the prices of other consumer goods and services shows that the prices that consumers pay for wireless services “have fallen even while inflation reached historic levels in 2022,” it said, citing data from the U.S. Bureau of Labor Statistics.

While consumers of wireless services aren’t paying more, despite historic inflation, carrier expenses “have risen during the same time,” said CTIA’s brief. “In particular, wireless carriers have spent billions of dollars investing in their networks -- further evidence of robust competition at work,” it said. Wireless customers’ data use has surged more than 480% over the past decade, it said. To meet this rising demand, and to retain and attract customers, carriers have made record-breaking network investments, it said.

Against that backdrop, it’s “unsurprising” that the plaintiffs haven’t identified “a plausible causal link” between the “supposed reduction” in competition that they allege followed T-Mobile/Sprint and AT&T’s and Verizon’s “independent pricing decisions,” said CTIA’s brief. Instead, the plaintiffs “point to price increases on a subset of wireless plans that occurred more than two years after the merger closed and while the national economy was still experiencing the aftershocks of the Covid-19 pandemic and record-high levels of inflation,” it said.

The plaintiffs’ speculation also is implausible “in light of broader, macroeconomic factors,” said CTIA’s brief. The “very sources” on which plaintiffs rely “state that the carriers adopted their price adjustments to account for the sharp rates of inflation that have gripped the economy in recent years,” it said.

In sum, the empirical data “confirm that the wireless services market is characterized by robust competition,” said CTIA’s brief. That competition has continued, and intensified, following T-Mobile/Sprint, it said. This only underscores “the highly speculative and implausible nature” of the plaintiffs’ theory of antitrust standing here, it said.

But by accepting the plaintiffs’ theory, the court’s Nov. 2 order permits wireless customers “to pursue antitrust claims based on mere alleged correlations in timing,” without allegations of a “plausible causal link” between a merger and a third party’s “subsequent price change,” it said. That approach “risks exposing businesses to the burden of defending against meritless antitrust suits” any time a merger closes, including during periods of relatively high inflation, it said.

Competitors may make independent business decisions to raise prices as inflation drives up costs, “and prospective plaintiffs may rely on alleged timing correlations to pursue antitrust claims against the recently merged business,” said CTIA’s brief. “This risk of liability may discourage competition and pro-consumer mergers and have other destabilizing effects on the industry,” it said.