Crony Capitalism and Antitrust
Maurice E. Stucke
University of Tennessee College of Law
October 10, 2011
CPI Antitrust Chronicle, October 2011
University of Tennessee Legal Studies Research Paper No. 164
In August 2011, the United States brought a landmark antitrust lawsuit to prevent the merger of two of the nation’s four largest mobile wireless telecommunications services providers, AT&T Inc. and T‑Mobile USA, Inc. But why are so many elected officials asking the Obama administration to intercede in the Department of Justice’s lawsuit to force a settlement? Why are they approving a merger that would likely lead to higher prices, fewer jobs, less innovation, and higher taxes for their constituents? Does it have anything to do with the money they are receiving from AT&T and T-Mobile?
This Essay examines the recent lobbying efforts in the AT&T/T-Mobile merger. AT&T spent $11.69 million on political lobbying in the first six months of 2011. In addition to hefty campaign contributions, it lobbied lawmakers with $52 steaks and $15 gin-and-cucumber puree cocktails.
But lobbyists, as this Essay outlines, are not the problem. The problem is the combination of lax campaign finance rules and antitrust’s prevailing legal standard, a flexible fact-specific rule of reason.
Number of Pages in PDF File: 8
Keywords: Antitrust, Clayton Act, Lobbying, AT&T, Mergers, Rule of Reason
JEL Classification: K21, L40, L49Accepted Paper Series
Date posted: October 11, 2011 ; Last revised: February 22, 2012
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