U.S. Launches Informal Antitrust Probe of Large Telcos

 |  Includes: S, T, VZ
by: Eric Savitz

The Obama Administration is taking on the phone companies.

According to the Wall Street Journal, the Department Of Justice has begun “an initial review” to determine whether large telecom companies - “such as” AT&T (NYSE:T) and Verizon (NYSE:VZ) - have abused their market power. The story is sourced to “people familiar with the matter.”

The story says the antitrust probe is in the early stages, and is not a formal investigation of any specific company.

The Journal suggests areas that could be the subject of the probe include whether wireless carriers are hurting smaller rivals with exclusive distribution deals, like Apple’s (NASDAQ:AAPL) relationship with AT&T for the iPhone, and the Sprint (NYSE:S) arrangement to sell the Palm (PALM) Pre. Last month, a group of U.S. senators called for an FCC probe of the relationships between carriers and handset makers over this same issue.

Another possible target of the DoJ inquiry: whether carriers are unfairly restricting the types of services other companies can offer on their networks.

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