AT&T Case Shows Antitrust Mettle

Deal makers are scrambling to determine what lessons to draw from the collapse of AT&T Inc.'s $39 billion acquisition of T-Mobile USA. Here's one: Don't underestimate the Justice Department's newfound toughness in policing mergers between rivals.

As the first term of the Obama administration draws to an end, a clearer pattern of antitrust enforcement is emerging. The Obama Justice Department has been quick to challenge "horizontal" deals—in which a company buys a direct competitor—in industries that are already highly concentrated. But in deals that aren't between direct rivals—"vertical" deals—it has taken a different approach, allowing deals but imposing legally binding restrictions on the acquirer's ability to use its prize to unfairly harm competitors.

The tougher stance shouldn't come as a surprise. President Barack Obama campaigned on reinvigorating antitrust enforcement, reversing the previous administration's more hands-off approach to mergers between rivals. Along with the Federal Trade Commission, the Justice Department last year released a new set of horizontal merger guidelines that spell out how antitrust enforcers determine whether to challenge a deal.