September 20, 2011, 11:32 AM — Search giant Google and wireless carrier AT&T each will be in Washington on Wednesday to defend themselves against allegations that they are engaging in anti-competitive behavior.
Google Chairman and former CEO Eric Schmidt is scheduled to testify before a Senate antitrust panel regarding its control of online search and whether the company's search results purposely bury links to competitors.
Meanwhile, in a less theatrical setting, AT&T is scheduled to meet in court with the U.S. Department of Justice over the company's planned $39 billion acquisition of T-Mobile USA from Deutsche Telekom.
The DoJ sued AT&T on Aug. 31, arguing that its proposed purchase of T-Mobile violated antitrust laws and would lead to less wireless competition and higher prices for consumers.
Don't expect much to come out of either gathering. The Senate hearing is for show only; federal antitrust enforcement is handled by the Department of Justice's Antitrust Division and the Federal Trade Commission, each of which can file civil lawsuits to halt anti-competitive behavior.
There'll be lectures and speeches from Senate panel members, testimony from Google competitors, more lectures, and through it all Schmidt will try to appear empathetic if not contrite, assertive if not defensive. Most of all, he needs to avoid making an unforced error, like officially recanting Google's "Don't Be Evil" motto.
As far as the AT&T case, three weeks after the Justice Department filed its civil suit is way too soon to expect progress toward any settlement, assuming one can be reached.
AT&T reportedly has been trying to sell off spectrum and subscribers in order to satisfy antitrust regulators, but the lawsuits just keep on coming. On Monday, Cellular South sued to block the T-Mobile acquisition.
Cellular South joins Sprint Nextel, which earlier this month filed its own lawsuit to block the deal. Also, seven states have signed on to the DoJ action.
AT&T is the No. 2 wireless carrier in the U.S., though in a virtual tie with Verizon Wireless. Should its purchase of No. 4 T-Mobile be approved, about 80% of the U.S. wireless market would be split between AT&T and Verizon.
Opponents of the merger say this would create a duopoly in which consumers would have fewer choices and eventually would pay higher prices.
Meanwhile, AT&T just wishes everybody in Washington would read "Atlas Shrugged."