Alleged Market Abuse Prompts Justice Department to Look Into Telecom Companies

Summary: AT&T Inc., Verizon Communication, and other giant telecoms in the US is now in hot water following reports saying that the Justice Department is now planning to look into their books due to alleged abuse of market power.

Following high-profile reports and various complaints from the people, US telecom companies are now in hot water after the Justice Department announced that it is conducting an initial investigation on grounds that the telecoms abused its market power limiting third party services into its network.

 In a report, the Journal said that the Antitrust Division of the US Justice Department has started its initial probe, saying that it is now on its early stages.

A source in the department said that there is no specific telco being investigated yet. However, the source added that the focus of the investigation is the exclusive agreements between mobile phone makers and the telecom companies.

“We are now looking into reports accusing telecom companies of unduly limiting third party services and other things that it can offer to their networks,” the source said.

Meanwhile, the DOJ has refused to comment on the issue, saying that no formal notice has been given to any networks.

Several report also said that lawmakers raised eyebrows on the issue whether this giant telecoms are abusing small rivals by signing an exclusive agreement with major phone makers.

One of the highlights of the debate is the deal entered by AT&T with Apple Inc., the maker of the popular iPhone series. It will be recalled that the two signed an agreement for the exclusive distribution of the phone to the telecom company.