Court Rules Evidence Against Telecoms Insufficient To Show Collusion

The major U.S. wireless companies may have raised text messaging fees at around the same time, but that doesn't mean they conspired to fix prices, a judge has ruled.

Allegations of price increases "do not give rise to more than the 'mere possibility' of an agreement, which is insufficient to state a claim for conspiracy," U.S. District Court Judge Matthew Kennelly in Illinois ruled last week as he dismissed an antitrust class-action lawsuit against the carriers.

The case encompassed several consumer class-action lawsuits filed against Sprint/Nextel, Verizon, AT&T, and T-Mobile last year, shortly after prices climbed to 20 cents per message. The consumers alleged that the companies began aligning their texting fees in 2005, when Sprint/Nextel, AT&T and Verizon started charging 10 cents per message; T-Mobile started charging 10 cents in 2006.

The companies subsequently raised prices to 15 cents in the first half of 2007. Sprint/Nextel boosted the price again to 20 cents toward the end of that year, and the other three followed throughout 2008, according to the lawsuit.



"Not one defendant attempted to attract additional customers by charging even a penny less per text message," the lawsuit alleges.

But Kennelly found that allegations of fee increases don't in themselves prove a conspiracy. The consumers "make no allegations about particular meetings at which they contend any of the defendants reached an agreement," he wrote. "They offer no statements by any of the defendants suggesting the presence of an agreement. ... Nor do they give any indication of the terms of the alleged agreement."

Lawyers for the consumers are considering whether to appeal, according to a spokesperson.

In addition to the litigation, the carriers also faced political fallout from the price increases. Last year, Sen. Herb Kohl (D-Wis.) sent inquiries to the carriers about text message fees. More recently, Kohl asked the Federal Communications Commission and Department of Justice to investigate competition in the wireless industry.

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