OK, so Carly herself isn’t specifically to blame. But the U.S. Department of Justice today cited last year’s T-Mobile USA ads — featuring the spokesmodel cleverly lampooning AT&T and Apple — to help make its case that AT&T’s proposed $39 billion acquisition of the Bellevue-based company will reduce competition in the market.
“Documents produced by AT&T and T-Mobile establish that a significant portion of customers who ‘churn’ from AT&T switch to T-Mobile, and vice versa,” reads one part of the DOJ complaint. “This shows a significant degree of head-to-head competition between the two companies, as demonstrated by T-Mobile’s recent television ads directly targeting AT&T. The proposed merger would, therefore, likely eliminate important competition between AT&T and T-Mobile.”
The stakes are extremely high for both AT&T and T-Mobile USA parent company Deutsche Telekom. If the acquisition doesn’t go through, AT&T has agreed to pay Deutsche Telekom a $3 billion breakup fee.
And Deutsche Telekom would be forced to try to figure out what to do with T-Mobile USA, which has continued to shed subscribers despite its aggressive new “challenger strategy.”
Earlier today, AT&T expressed surprised at the DOJ suit and said it would continue to fight for the deal.
In a statement this afternoon, Deutsche Telekom said it is “very disappointed by the DOJ’s action, and will join AT&T in defending the contemplated merger against the complaint in court. DOJ failed to acknowledge the robust competition in the U.S. wireless telecommunications industry and the tremendous efficiencies associated with the proposed transaction, which would lead to significant customer, shareholder, and public benefits.”
Read the full DOJ complaint here: PDF, 25 pages.