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The AT&T Lawsuit: Is It About Jobs?

Unemployment
Unemployment

The Justice Department’s lawsuit to block the merger of AT&T and T-Mobile may be motivated by the desire of the Obama administration to preserve jobs in a weak economy.

“The view that this administration has is that through innovation and through competition, we create jobs,” said James M. Cole, the deputy attorney general, at a news conference Wednesday, according to The New York Times.

Mergers often result in jobs cuts, the the Times reports Cole as saying, “so we see this as a move that will help protect jobs in the economy, not a move that is going in any way to reduce them.”

The use of antitrust laws to protect jobs would be, at the very least, a dramatic legal innovation. Layoffs are not usually viewed as anticompetitive behavior.

“I don't believe that preserving jobs is a valid use of this [antitrust] power. Almost all mergers result in fewer jobs, so basically no merger should then go through,” law professor Christina Hurt writes at the blog The Conglomerate.

Of course, the administration is not making this its formal legal position. The Justice Department’s complaint looks relatively straight-forward. But Cole’s comments may shed light on the motivation—if not the legal argument—for stopping this merger.

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