WEBVTT - Bloomberg Law Brief: Antitrust Issues Surround Merger (Audio)

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<v Speaker 1>Well, now it's time for our daily Bloomberg lab reef

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<v Speaker 1>exploring legal issues in the news, brought to you by

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<v Speaker 1>American Arbitration Association. Business disputes are inevitable, resolve faster with

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<v Speaker 1>the American Arbitration Association, the global leader in alternative dispute

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<v Speaker 1>resolution for over ninety years. More at a dr dot org.

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<v Speaker 1>Today Bloomberg Lajos drum Grosso, and Greg Sture discuss anti

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<v Speaker 1>trust issues that may surround any plans to combine Sprint

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<v Speaker 1>and T Mobile. They speak with Jennifer Ree, senior litigation

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<v Speaker 1>analyst for Bloomberg Intelligence, sketch out if you would quickly

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<v Speaker 1>first just the state of the mobile phone market. Where

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<v Speaker 1>do Sprint and T Mobile fit? What share of the

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<v Speaker 1>market do they have? That sort of thing? Well, right now,

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<v Speaker 1>essentially in the US, they're just really four big wireless players,

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<v Speaker 1>and I think most people know that with Verizon is

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<v Speaker 1>the biggest at around thirty eight percent based on Bloomberg data,

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<v Speaker 1>which which isn't precise, but it's close a T and

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<v Speaker 1>T at about market share, T Mobile at about and

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<v Speaker 1>Sprint at about eleven percent, and then leaves about ten

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<v Speaker 1>percent for a lot of smaller non national type players.

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<v Speaker 1>Had things in the marketplace changed a lot since the

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<v Speaker 1>previous attempt to merge the companies was rejected, or is

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<v Speaker 1>it more about the change in administrations? You know, I

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<v Speaker 1>think things have changed, but a lot of things have

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<v Speaker 1>also stayed the same. About what was problematic in the past,

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<v Speaker 1>some of those factors will remain problematic today. And of

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<v Speaker 1>course the administration is changing too, and there's been a

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<v Speaker 1>lot of speculation about that. And I think historically Republican

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<v Speaker 1>administrations do tend to be easier on deals than democratic ones,

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<v Speaker 1>but not in an extreme manner, really only on the fringe,

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<v Speaker 1>just sort of the slightest bit. There isn't really a

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<v Speaker 1>big difference in the evaluation that that the antitrust regulators

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<v Speaker 1>will go through to determine whether a deal might be

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<v Speaker 1>harmful to a market is the same no matter what

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<v Speaker 1>political party you come from. So, as you laid it out,

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<v Speaker 1>Sprint and T Mobile are a distant third and fourth

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<v Speaker 1>in the market, and and I think one can anticipate

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<v Speaker 1>if they go forward with this, they will argue that

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<v Speaker 1>we will be a stronger competitor to Verizon and a

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<v Speaker 1>T and T um Is that an argument that you

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<v Speaker 1>see as having in the potential to have some legs

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<v Speaker 1>to it. Greg, I think it's one of the best

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<v Speaker 1>arguments they have. I think it's a good argument, and

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<v Speaker 1>I think it's it's likely, you know, a good argument

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<v Speaker 1>for them to go in with, and and if they

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<v Speaker 1>have any chance at all, it's it's probably based on

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<v Speaker 1>something like that. I think the problem here is that

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<v Speaker 1>they it's an uphill climb. They walk in, you know,

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<v Speaker 1>with the odds against them, because as a threshold matter,

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<v Speaker 1>agencies will ask the d J will ask, well, what

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<v Speaker 1>is the concentration in the market, And that's just a

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<v Speaker 1>matter of math, and they take those market shares, they

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<v Speaker 1>square them, and they sum the squares, and they look

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<v Speaker 1>at the difference before the merger and after the merger,

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<v Speaker 1>and if those numbers exceed that change that difference exceeds

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<v Speaker 1>two hundred, which it does here in a market that

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<v Speaker 1>is deemed to be highly concentrated, which this is automatically,

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<v Speaker 1>they consider that as a threshold matter, to be a

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<v Speaker 1>deal likely to cause harm to the market. As Jennifer Ree,

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<v Speaker 1>senior litigation analyst for Bloomberg Intelligence, speaking at the Bloomberg

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<v Speaker 1>Student Grosso and Greg Sture, you can listen to Bloomberg

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<v Speaker 1>Law weekdays at one p m. Wall Street Time here

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<v Speaker 1>on Bloomberg Radio Now. Among his top legal stories from

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<v Speaker 1>Bloomberg Law, A federal appeals court has reinstated the six

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<v Speaker 1>game suspension a pro football star Ezekiel Elliott. A trial

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<v Speaker 1>judge had halted the punishment after determining the NFL's arbitration

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<v Speaker 1>process had treated the Dallas running back unfairly. Elliot was

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<v Speaker 1>accused of mistreating a former girlfriend, but no formal charges

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<v Speaker 1>were filed. Elliott's legal team says it's now considering its

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<v Speaker 1>options and as this morning's Bloomberg Law Brief, you can

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<v Speaker 1>find more illegal news at Bloomberg Law dot com and

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<v Speaker 1>Bloomberg BNA dot com. Attorneys will find exceptional legal research

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<v Speaker 1>and business development tools there as well. Visit Bloomberg Law

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<v Speaker 1>dot com and Bloomberg BNA dot com for more information