What was set to be the blockbuster business deal of the year is officially no longer a deal at all. Last week, AT&T called off its $39 billion attempted acquisition of T-Mobile USA. AT&T had high hopes for the merger, as it would have relieved some of the network congestion that iPhone users experience.
AT&T called it off after fierce opposition from the Justice Department and the Obama Administration. The Justice Department sued in August to stop the deal. In response, AT&T offered several concessions like selling off more than a quarter of T-Mobile’s customers to another, smaller wireless competitor, but the Justice Department did not budge.
AT&T had hoped the deal would have improved network access for its customers. Consumer advocates, on the other hand, feared a monopoly at the top of the wireless market. AT&T has 100 million wireless subscribers, just behind Verizon’s 107 million. If you had thrown in T-Mobile’s 34 million, that would have put AT&T at the top of the wireless market. Advocates feared that the merger would have led to higher prices for consumers and reduced innovation in the industry.
Reducing innovation is a legitimate fear in any technology industry. Innovation occurs so rapidly in this industry that that there is always this tension between moving forward and protecting intellectual property. Companies have less of an incentive to innovate if they will not recoup their costs and earn profits. At the same time, restricting access to new technology limits its development even further.
How has your business balanced innovation and intellectual property protection?
Klein Trial Lawyers – Los Angeles business litigation lawyers