U.S. judge dismisses suits against mobile firms

4 mobile carriers cleared of breaking antitrust rules

August 31, 2005|By BLOOMBERG NEWS

NEW YORK - A federal judge dismissed yesterday antitrust lawsuits claiming that Cingular Wireless LLC, Verizon Communications Inc. and two other mobile phone companies illegally forced customers to buy phones that only worked on their own networks.

U.S. District Judge Denise Cote threw out allegations in a group of lawsuits claiming that the requirements constitute an illegal tying arrangement under antitrust law.

"The plaintiffs have not presented sufficient evidence to prove that any one defendant has the degree of market power necessary to sustain a tying claim or show that any of the defendants' alleged tying arrangements has an actual adverse effect on competition in the U.S. market for wireless handsets," Cote wrote in a 63-page decision.

Cote had earlier rejected claims that the companies illegally used monopoly power.

Yesterday's ruling throws out the remaining claims in the cases, the first of which was filed in 2002.

Other defendants in the cases are Sprint Nextel Corp. and Deutsche Telekom AG's T-Mobile USA.

"We're pleased with the ruling," said Nancy Stark, a Verizon Wireless spokeswoman.

Scott Bursor, a lawyer for the cell phone customers, and Scott Stoffel, a spokesman for Sprint Nextel, declined to comment immediately.

"We're still analyzing the ruling," Bursor said.

Cingular spokesman Mark Siegel didn't immediately return a phone call seeking comment, and Mark Nierwetberg, a spokesman for Deutsche Telekom, couldn't be reached.

Cotes' ruling dismisses the five cases against U.S. wireless companies filed by consumers who sought class-action status to represent all consumers who bought cellular service from the companies since 1998.

Cingular, a joint venture between SBC Communications Inc. and BellSouth Corp., is the biggest U.S. mobile-phone carrier.

Shares of SBC fell 2 cents to $23.81 at 5:12 p.m. in New York Stock Exchange composite trading. Atlanta-based BellSouth fell 23 cents to $26.18. Shares of Verizon Communications Inc., parent of No. 2 Verizon Wireless, fell 7 cents to $32.35.

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