WASHINGTON (Reuters) - California Attorney General Xavier Becerra, whose state is leading a fight to stop T-Mobile US (O:TMUS) from buying Sprint (N:S), warned on Tuesday his agency was concerned about corporate consolidation, particularly in cases where U.S. federal regulators do not take action.
He said in an interview with Reuters that if states can successfully block the Sprint deal it would send a message that "antitrust enforcers will be back in the driver's seat. It will make industries, not just telecoms, but industries, recognize that there are antitrust laws that can be enforced."
California, along with New York, is leading the effort in Manhattan federal court to show the proposed $26.5 billion deal between the No. 3 and No. 4 wireless carriers is illegal because it would raise prices, particularly for users on prepaid plans.
Becerra wants to protect customers from anticompetitive mergers in every industry.
Last month, San Francisco-headquartered Charles Schwab Corp (N:SCHW) agreed to buy TD Ameritrade Holding Corp (O:AMTD) in a $26 billion deal to create a brokerage giant in a market that has been ravaged by price wars.
While analysts expect federal regulators will take a soft line on the deal, Becerra did not rule out a state probe by his office. "We will look at anything that has an impact on the ability of consumers at the end of the day to get a good deal. And financial services are critically important," he said.
Becerra, whose state is home to Facebook (O:FB) and Google's parent Alphabet (O:GOOGL), said he was concerned about consolidation, and that the tech sector was "growing and consolidating."
"A lot of us are concerned about making sure that consolidation is for efficiency purposes" rather than to push for higher prices, he said, noting California's successful effort in 2017 to prevent Valero Energy Corp (N:VLO) from buying the last independent petroleum distribution terminal.
Becerra expressed frustration with Wall Street's optimism about the benefits of mergers.
"On Wall Street, consolidation is almost a given in order for you to ensure greater quarterly returns. We want to put the brakes on those who want to consolidate for the sake of quarterly returns," he said. "If you're consolidating, we're looking."
Over the past two years, a more relaxed mood under Trump administration regulators has helped unleash big-ticket takeovers in the financial sector, after a lull following the 2007-2009 global financial crisis.