T-Mobile, Sprint Beat State-Led Merger Challenge
U.S. District Judge Victor Marrero issued an order on Tuesday in which he refused to block the planned mega-merger between T-Mobile and Sprint. The proposed $56 billion merger would bring the major players in the US wireless service market down from 4 to 3 providers. Judge Marrero rejected the case put forward by 14 attorneys general who claimed that the deal will cost consumers billions of dollars more for wireless service. The judge was not convinced by arguments that the merger would result in T-Mobile practicing anti-competitive conduct or that Sprint could remain a viable competitor without it. New York Attorney General Letitia James was less optimistic, believing that Tuesday's ruling will be "bad for consumers, bad for workers and bad for innovation." The states are currently exploring their options and an appeal is possible.
Uber, Postmates Fail To Block California Contractor Law
On Monday, a California federal judge denied a request by Uber and Postmates to halt enforcement of a new law that makes it harder for their workers to be classified as independent contractors. The law in question, Assembly Bill 5, is an expansion of the "ABC test" utilized by the California Supreme Court to assess whether businesses have correctly classified their workers as independent contractors. The companies argued that California lawmakers "irrationally and unconstitutionally" targeted app-based companies through the passage of the bill and that enforcement will result in untold damage to their businesses. In denying the request for an injunction, U.S. District Judge Dolly Gee concluded that the "balance of equities and the public interest weigh in favor of permitting the state to enforce this legislation" and that the Assembly Bill 5 was not an unconstitutional targeting of gig economy companies like Uber and Postmates.
Amazon Wins Injunction In US 'Jedi' Contract Fight
In a win for Amazon, a federal judge granted its request for an injunction in its US Joint Enterprise Defense Infrastructure ("Jedi") contract fight. Amazon was favored to win the cloud computing deal last year but the Department of Defense gave the contract to rival Microsoft. Amazon then brought suit claiming that this surprising turn of events resulted from the Defense Department bowing to political pressure from President Trump. The Jedi contract, worth up to $10 billion over 10 years, is one of the largest Defense Department contracts and drew legal challenges over the procurement terms even before it was awarded. On Thursday, Judge Patricia Campbell-Smith of the US Federal Claims Court ordered the US to halt its Jedi activities while Amazon's accusation of Defense Department bias are reviewed in court. The Defense Department has denied all claims of bias.
Huawei: US Issues New Charges Of Racketeering and Theft
US prosecutors have filed new charges in federal court this Thursday alleging that Chinese telecoms giant, Huawei, has violated the terms of partnerships with US companies and stolen trade secrets such as source code and robot technology. Prosecutors now allege that this "decades-long" plan to steal technology from US firms was accomplished in part by the practice of Huawei offering bonuses to staff who obtained "confidential information" from competitors. These accusations are in addition to a number of charges brought by the US last year against the Chinese smartphone manufacturer. Huawei claims that these new charges are nothing more than a "contrived repacking" of claims already litigated.
FTC Will Review Past Mergers By Facebook, Google And Other Big Tech Companies
The Federal Trade Commission announced Tuesday that it would look into the past mergers by Alphabet, Apple, Amazon, Facebook and Microsoft. Specifically, the FTC wants to analyze the ways these tech giants acquired their rivals and if these acquisitions were contrary to federal antitrust laws. Using its 6(b) authority, the FTC will require the five companies to provide information about the smaller start-ups they have purchased over the last decade, including documents for deals that were not large enough to warrant closer inspection at the time of acquisition. The tech giants will be required to explain their acquisition strategies and the manner in which they integrate the start-ups' data into their own services. While the FTC's review will not necessarily result in law enforcement action, it will help generate a large body of data that can inform future Congressional action and law enforcement decision-making.