U.S. Justice Department finds its Backbone!

The U.S. government finally took the kind of action that has been absent in the merger and acquisition arena.  The financial stations and web sites call it M&A.  Here in California we have seen the number of banks, supermarkets, and drug stores decline as one after another is bought by a competitor or an out-of-state company.  Sadly no government agency has stood in the way of these consolidations.

In every instance the claim of lower costs to do business was the proclaimed benefit of the acquiring company.  In fact those lower costs (thanks to the ensuing layoffs) resulted in higher profits for them but resulted in higher costs to the public.

Today the U.S. Justice Department filed suit to block AT&T’s $39 billion deal to buy T-Mobile USA on grounds that it would raise prices for consumers.  Of course AT&T said it would fight for their acquisition to be approved “enormous benefits of this merger.”  The Associated Press provided some of the current happenings in this saga.

To reinforce the Justice Department case consumer groups like AARP and Consumers Union should both enter supporting pleas (amicus curiae).