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News

DOJ Could Investigate AT&T & Apple for Antitrust

Monday, July 6th, 2009 at 5:06 PM - by Bryan Chaffin

Apple vs Doj?The U.S. Department of Justice (DOJ) could investigate the telecom industry, including AT&T and Apple for the two companies' iPhone exclusive deal, for antitrust violations. The Wall Street Journal reported Monday that the DOJ is concerned that the largest telecom carriers have abused the market power they have accumulated, and that such exclusive deals between the largest carriers and handset manufacturers could hurt smaller competitors.

The Journal cited unnamed source "familiar with the matter," and said that the investigation is currently in a preliminary stage, and that no specific companies are yet being individually targeted.

The newspaper also reported that the investigation could review whether telecom carriers are unduly restricting the types of services other companies can offer on their networks. We noted that Fortune's Apple 2.0 blog cited Apple's App Store as an example of such a service, but the App Store is provided by Apple, not AT&T, is accessible through computers, and is platform-dependent, not carrier.

The last major Sherman Antitrust Act case to come out of the DoJ was the case against Microsoft, launched under the Clinton administration. That case was eventually handed off to the Bush Administration's DoJ, which largely punted on the case during an appealed remedy phase.

There have been no major antitrust cases since, but Christine Varney, the current antitrust chief in the Obama DoJ, has stated publicly that she wants to reassert the government's role in policing antitrust activity in the market place. Any investigation of the telecom industry could be a test of this renewed resolve from within the DoJ.

9 comments from the community.

You can post your own below.

geoduck said:

July 6th, 2009 at 4:25 PM

the DOJ is concerned that the largest telecom carriers have abused the market power they have accumulated, and that such exclusive deals between the largest carriers and handset manufacturers could hurt smaller competitors.

Well duh. I think it also hurts consumers. The question is though, what are the alternatives? Would for example opening the market up so that handsets could not be tied to a particular carrier be better. It might increase competition but handsets would cost more. I’m interested in what might be done about this.

whether telecom carriers are unduly restricting the types of services other companies can offer on their networks.

I really don’t know what could be done about this as the networks are private property.

   Quote

Sir Harry Flashman said:

July 6th, 2009 at 6:47 PM

Suppose Apple was to produce documents showing that they offered the iPhone to a number of carriers who then refused the offer.

How many small cell carriers are there? I tried to search and couldn’t find a definitive answer, what I think is complete listing. Maybe this list is accurate. From there I see that there is 10 national and large region carriers, maybe 7 other smaller regional or specialty carriers, and maybe a dozen prepaid services some of which are owned by big time operators.

Remember when they broke Ma Bell into a number of smaller companies? You could chose from quite a few long distance services. Then the Baby Bells seemed to coalesce into AT&T and is once again a big company.

It is probably quite a expensive to start up a cell service company. Building towers, stores, service, making deals with handset manufacturers. Perhaps if the big companies were forced to cell some bandwidth at cost to small companies, but right now I don’t see how hammering the trusts is going to change anything.

   Quote

geoduck said:

July 6th, 2009 at 7:16 PM

forced to cell some bandwidth

Was that another pun?

   Quote

Sir Harry Flashman said:

July 6th, 2009 at 7:28 PM

Was that another pun?

Only if you think homophones are funny smile

   Quote

Sir Harry Flashman said:

July 6th, 2009 at 7:32 PM

Doh! I blew a chance to make a pun using cell phone and homophone. Getting too close to supper.

   Quote

Bosco said:

July 6th, 2009 at 7:35 PM

Only if you think homophones are funny

Who said there was anything gay about the iPhone? And why is that funny?

   Quote

geoduck said:

July 6th, 2009 at 7:36 PM

Only if you think homophones are funny

You mean like on Will & Grace?

   Quote

deasys said:

July 6th, 2009 at 9:05 PM

Only if you think homophones are funny

I don’t. Hey—some of my best friends are homophones.

   Quote

iJack said:

July 6th, 2009 at 10:09 PM

Only if you think homophones are funny smile

  Not especially, but do I think homophobes are a hoot!

   Quote

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