Wednesday, November 9, 2011

Justice Department Gears Up for ATT Litigation

The Justice Department's rejection of AT&T's proposed purchase of T-Mobile USA will test new federal guidelines on challenging mergers and the companies' resolve in forming the nation's largest wireless carrier.

A courtroom battle is likely and could wring out information that the companies would prefer to keep private. Still, AT&T Inc. has a big incentive to fight: If the deal is called off, the company has to pay a $3 billion breakup fee and surrender some of its unused spectrum for wireless communications.

AT&T is promising to fight the Justice Department's decision. The department filed a lawsuit Wednesday to block the $39 billion deal, saying it would reduce competition and lead to price increases for customers.

If AT&T follows through on that, it could produce the biggest antitrust showdown since business software maker Oracle Corp. squared off with the federal government seven years ago. That dispute, triggered by the government's decision to block Oracle's proposed purchase of rival PeopleSoft Inc., exposed several well-kept corporate secrets and required Oracle CEO Larry Ellison to testify before a packed courtroom.

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