DOJ Antitrust Boss Delrahim Ignored Hard Data As He Rubber Stamped T-Mobile Merger

Deals

from the dysfunction-junction dept

Technically, the head of the DOJ’s antitrust division, Makan Delrahim, is supposed to enforce antitrust law and derail harmful monopolies when they arise. But that’s certainly not what’s happening with the DOJ review of T-Mobile’s $26 billion merger with Sprint, which antitrust experts (and even the DOJ’s own economists) have repeatedly warned will indisputably reduce competition, raise rates, and result in thousands of layoffs as duplicative positions are eliminated.

As state AGs continue their lawsuit to stop the merger, details were revealed last week in court showing that Delrahim did everything in his power to help shovel the deal through the merger approval process, including providing T-Mobile tips (via both personal and business accounts) on which officials they should focus their lobbying attention on in order to get the deal across the finish line:

“As the $26 billion blockbuster merger between T-Mobile and Sprint teetered this summer, Makan Delrahim, the head of the Justice Department?s antitrust division, labored to rescue it behind the scenes, according to text messages revealed this week in a lawsuit to block the deal.

Mr. Delrahim connected company executives with the F.C.C. and members of Congress. And he gave executives insight into the thinking of Ajit Pai, the chairman of the F.C.C. who would also have to approve the merger.

He is ?open and willing? to discussions about the deal, Mr. Delrahim said in one text message in June, a month before regulators blessed the transaction.”

Delrahim’s job is to look at the evidence and protect markets where necessary, not help companies push deals that erode competition, harm workers, and hurt markets. Keep in mind, past deals just like this one (AT&T/T-Mobile 2011, T-Mobile/Sprint 2014) were blocked because the harm was so obvious there was simply no way to justify it. This latest merger is no different, yet government officials have stopped even pretending to care. They’re intent on shoveling this turd of a deal across the finish line at all costs at the behest of T-Mobile, Sprint, and Japan’s Softbank.

The FCC rubber stamped the merger before Commissioners had even seen their own staff’s full economic analysis. FCC staffers privately met with T-Mobile numerous times to massage their underlying and fragile arguments. Former FCC officials (Clyburn, McDowell) have happily lobbied on T-Mobile’s behalf, and T-Mobile executives ramped up patronage of Trump’s DC hotels to curry favor with the administration. That’s all capped off by Delrahim all but putting out runway lights for T-Mobile in a bid to shine up a deal that, again, is going to be indisputably bad for consumers and the market.

Former FCC staffers like Gigi Sohn were not what you’d call impressed:

To justify its mindless rubber stamp of the deal, the DOJ has pushed forth a shaky plan that involves giving Dish Network some spectrum (and prepaid brand Boost Mobile), then just hoping the company can build a replacement fourth wireless carrier over the next 7 years. But with T-Mobile, Verizon, and AT&T all heavily incentivized to make sure a strong fourth competitor never emerges, Dish having a reputation for empty promises and bluster, and regulators largely captured by industry players (who again, want less competition to boost revenues) few serious analysts actually think the plan’s going to work.

This is, of course, the same DOJ that folks seriously hope will come in and “fix big tech” via an ocean of new antitrust inquiries. But it’s pretty damn clear this DOJ doesn’t actually give a damn about those responsibilities, and has been largely captured by the telecom industry under former Verizon lawyer Bill Barr. And while US corruption is nothing new, we seem to be entering a new era where we can’t even be bothered with the faintest pretense to the contrary.

Filed Under: antitrust, assistance, competition, doj, fcc, lobbying, makan delrahim
Companies: sprint, t-mobile