T-Mobile US faces class-action suit from AT&T and Verizon subscribers

Some US mobile subscribers reckon the merger of T-Mobile and Sprint resulted in higher bills and want the deal to be reversed.

We have Reuters to thank for this update, as well as links to court documents. The class-action case, potentially on behalf of all AT&T and Verizon subscribers, was filed last year and feels somewhat speculative. Nonetheless, Judge Thomas Durkin has ruled against TMUS’s motion to dismiss the whole thing for ‘failure to state a claim’. He did, however, support former Sprint owner SoftBank’s plea to be left out of the matter.

On one level, the assertion that the merger reduced competition is undeniable, since it reduced the number of national US mobile operators from four to three. The plaintiffs may even be able to prove that their phone bills have gone up since the 2020 merger. What will be much more difficult is proving causation rather than correlation between the two events.

Furthermore, the effect on competition was the focus of very lengthy deliberation by the powers that be, before they allowed the deal to go through. As is often the case, conditions were attached, including a leg-up for new national MNO Dish. So, if anyone, surely the regulatory authorities should be the target of a case like this, rather than TMUS.

But it will presumably be much easier to extract compensatory payments from TMUS than a government agency. The bid to reverse the mega-merger seems especially far-fetched and is presumably an extreme negotiating position from which the plaintiffs expect to retreat in favour of a nice big payday.

We could see no date for the matter to be tried in court but it’s hard to see how the plaintiffs could prove their case. Maybe they’re just hoping TMUS will settle early to make it go away. Reuters has a good quote from the TMUS lawyers that seems to sum the whole thing up nicely: “If plaintiffs are unhappy with Verizon and AT&T, there is a remedy available in the highly competitive market that wireless consumers enjoy today — they should switch to T-Mobile, not sue it.”

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