I Commend AT&T and T-Mobile for Fighting

Competition is beautiful. As an antitrust lawyer, I often face situations where one side or the other asserts that competition is restricted for some reason. And sometimes it isn’t, but another party claims that it is because it is losing the competition.

Or a government official prematurely acts on a fashionable new paper from a confident economist describing an economic model—with several assumptions having nothing to do with the real world—showing that some business practice violates the antitrust laws. It is a lot of work—but important work—to untangle these allegations.

So when I read an article that shows honest straightforward competition between two companies, I smile.

When I read the Wall Street Journal yesterday, I noticed a short article by Ryan Knutson and Everdeen Mason explaining that AT&T said that it will go after T-Mobile customers by offering them up to $450 to switch to AT&T.

AT&T’s offer reacts to aggressive competition by T-Mobile, which has targeted AT&T in ads, and has cut costs and improved contracts. Knutson and Mason point out that T-Mobile was expected to announce an offer similar to AT&T’s in the coming days.

Ladies and gentlemen, this is what real competition looks like: Two companies duking it out to improve their products and prices to gain market share. Consumers win here.

I commend both AT&T and T-Mobile for fighting, and hope that the battle continues.

Sometimes in markets with few competitors and high-barriers to entry, like the market for mobile-phone services, companies won’t compete hard. They may play follow-the-leader when it comes to pricing, and innovation can suffer.

For those that like jargon, this is called conscious parallelism, and it is both common and often legal.

So when companies that might get away without competing do, we should commend and encourage them.