The U.S. Department of Justice this week filed an antitrust lawsuit in an attempt to block AT&T Inc.’s acquisition of T-Mobile USA Inc.

The suit filed Wed. U.S. District Court for the District of Columbia states “the combination of AT&T and T-Mobile would result in U.S. consumers facing higher prices, fewer choices, and lower quality products”.

AT&T said it was “surprised and disappointed” by the suit and that it vigourously contest the matter in court.

AT&T and T-Mobile USA in Mar. agreed in a takeover by AT&T for $39 billion in cash and stock.

The merger contract included a breakup clause that would cost AT&T $3 billion in cash, wireless specturm, and reduced call charges on AT&T’s network to T-Mobile.

The FCC said this week it would continue review of the proposed merger.

An acquisition of T-Mobile by AT&T would create the largest mobile wireless device company at 130 million subscribers. Verizon Wireless, the current wireless market leader, holds 100 million subscribers. Sprint Corp., the current No. 4, holds 30 million.

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