Sprint takeover of T-Mobile may hit regulatory wall

A report from Stifel Financial revealed that a U.S. Justice Department official has hinted that at least some in the department have grave doubts about the proposed Softbank/Sprint takeover of T-Mobile.

According to Stifel, Renata Hesse, deputy  assistant attorney general for criminal and  civil operations at DOJ’s Antitrust Division, praised innovation at a Stanford University technology conference. Ms. Hesse said, “While competitive prices  are – and  will remain – a  key  objective, the  division  fully appreciates the  importance of innovation.  “Innovation  can  dramatically improve consumer welfare  by motivating the introduction  of extraordinary new products.”

Moreover, she said that some proposed mergers would “likely would harm  competition by reducing innovation.” And, “The [DOJ] often finds compelling  evidence – including internal  company documents – establishing that pre-merger competition between the merger firms was an important  driver of innovation,” she  said.

Renata Hesse’s remarks echo a DOJ filing in 2013 which said that the department, “believes it is essential to maintain  vigilance against any lessening of the intensity of competitive market  forces.”

Speed Matters urges the Justice Department to halt the merger, finding it harmful to consumers, to workers, and to competition and innovation.

DOJ Official’s Focus on Innovation Highlights a Key Hurdle for Sprint/T-Mo (Stifel Financial report, Jan. 23, 2014)

At the Intersection of Antitrust & High-Tech: Opportunities for Constructive Engagement (Renata Hesse, U.S. Dept. of Justice, Jan. 22, 2014)