Crony Capitalism and Antitrust

8 Pages Posted: 11 Oct 2011 Last revised: 19 Jan 2014

Maurice E. Stucke

University of Tennessee College of Law; The Konkurrenz Group

Date Written: October 10, 2011

Abstract

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.

Keywords: Antitrust, Clayton Act, Lobbying, AT&T, Mergers, Rule of Reason

JEL Classification: K21, L40, L49

Suggested Citation

Stucke, Maurice E., Crony Capitalism and Antitrust (October 10, 2011). CPI Antitrust Chronicle, October 2011; University of Tennessee Legal Studies Research Paper No. 164. Available at SSRN: https://ssrn.com/abstract=1942045

Maurice E. Stucke (Contact Author)

University of Tennessee College of Law ( email )

1505 W. Cumberland Ave.
Knoxville, TN 37996
United States
865-974-9816 (Phone)

HOME PAGE: http://law.utk.edu/people/maurice-stucke/

The Konkurrenz Group ( email )

5335 Wisconsin Ave., NW
Suite 440
Washington, DC 20015
United States

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