T-Mobile Merger and the Dangers of Corporate Power

To big companies like T-Mobile, increased market share equals increased power.

The Republican coalition changed dramatically during Donald Trump’s presidency. We are no doubt still a party that supports lower taxes and less regulation, and President Trump’s record in those areas was the strongest we have seen from a modern Republican president. But the party also focused more on issues impacting working-class families—expanding and improving the child tax credit, bringing more jobs home through fairer trade deals, and pushing back on the woke left’s radical agenda that pits all of us against each other, including our kids.

An important lesson of the Trump presidency was recognizing that the threats to our liberty do not solely come from the government. The modern GOP understands the importance of reining in unaccountable institutions and reducing the concentration of corporate power. Big corporations are flexing their muscles by censoring conservatives, threatening states that pass legislation the left doesn’t like, and pushing racist, anti-American diversity, equity and inclusion programs. Florida Governor Ron DeSantis and other Republican leaders are picking up where Trump left off in this regard, balancing the need to promote a robust economic climate with a recognition that Big Business doesn’t always have our best interests at heart.

Unfortunately, even the architect of this realignment sometimes gets it wrong. Mergers and acquisitions are major catalysts for the concentration of corporate power, and one in particular—the controversial merger between T-Mobile and Sprint that the Trump administration approved in 2020—shows how higher corporate profits are often earned on the backs of job destruction, lower wages, and less access to goods and services for working-class people.

T-Mobile and Sprint’s $ 26-billion merger was designed to increase profits and shareholder returns by combining America’s third- and fourth-largest cell-phone companies into one behemoth. The companies had a lot of convincing to do to get regulatory approval—there were concerns about price increases and job losses, including from Texas Attorney General Ken Paxton, who joined multi-state litigation affecting the deal.

They made a lot of lofty promises to get their deal done. According to then-CEO of T-Mobile John Legere, “this merger is all about creating new, high-quality, high-paying jobs, and the New T-Mobile will be jobs-positive from Day One and every day subsequently. ”This proved to be false, but ultimately, the FCC and DOJ were satisfied by the companies’ commitments and bought into their false promises to avoid job cuts and higher costs to consumers. approved the deal.

That naive decision quickly proved itself to be a mistake. The new, post-merger T-Mobile almost immediately started closing stores and slashing jobs. To this point, according to numerous legal filings by a coalition of former dealership owners, more than 2,500 jobs T-Mobile and Sprint deliberately misled the Trump DOJ and FCC about the impact of the merger.

Even if you don’t have a family member working for the company, you’re still likely to feel the impact. Despite repeated pledges not to raise prices after gaining market share, T-Mobile raised home-internet prices by 20 percent, less than a year after the merger was approved.

The pre-Trump GOP might have shrugged this off as necessary cost-cutting to drive higher efficiencies and thus higher shareholder returns. This would be considered the free market at work. But times have changed. Our coalition has changed. And we simply cannot ignore. the consequences of consolidating corporate power at the expense of workers and families.

And especially not when they tell blatant falsehoods to the small-business owners and employees throughout their network. In various litigation filings, former Sprint dealers have called out “anti-competitive, unfair, and deceptive behavior” on the part of T-Mobile, which “concealed material facts regarding its devastating intentions.”

T-Mobile’s pursuit of higher profits driven by increased market share is a universal goal among big, publicly traded companies. It’s the incentive that has led us to “too big to fail” banks and massive social-media companies, to whom increased market share Despite President Trump’s strength in holding big woke corporations accountable, this was a blind spot for his administration.

As we head into the midterms, Republicans must wake up and prevent multinational corporations from exploiting our desire for economic growth in order to punish the working class. We were asleep at the wheel with respect to the Sprint-T-Mobile merger, and we’ As Republicans look to take back both chambers of Congress, investigating these types of unfair deals, and holding these corporate leaders accountable for their lies, must be a priority.

Terry Schilling is the president at American Principles Project. Follow him on Twitter @ Schilling1776..

This article was supported by the Ewing Marion Kauffman Foundation. The contents of this publication are solely the responsibility of the authors.

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