States’ Support for DoJ Suit Could Tilt Scale Against AT&T

The U.S. Department of Justice received the support of seven state attorneys general Friday in its opposition to the proposed merger between AT&T and T-Mobile.

The merger, announced in March and now facing an antitrust lawsuit from the DoJ, would combine the second and fourth largest wireless providers in the nation. It’s a move that AT&T claims would increase capacity to expand its 4G LTE technology and create jobs.

Opponents such as consumer advocacy groups and other wireless providers like Sprint, however, are vehemently opposed to the merger, claiming it would stifle competition and lead to poorer service. Sprint has questioned AT&T’s claims that jobs would be created. A leaked AT&T memo also cast doubt on claims that AT&T needed T-Mobile’s infrastructure to expand its service, suggesting that AT&T was going after T-Mobile simply to keep it out of the hands of Sprint, a company with which T-Mobile was also in acquisition talks.

Now, the US$39 billion merger faces a lawsuit from the DOJ on antitrust claims, and a bipartisan crew of seven states has joined the fight. Attorneys general from New York, Washington, California, Illinois, Massachusetts, Ohio and Pennsylvania are joining the claim that the merger is anticompetitive and would kill innovation.

The DoJ did not respond to the E-Commerce Times’ requests for further comment on the suit.

Vested Interest for States

It’s not uncommon for state attorneys general to join federal antitrust suits.

“States like New York have a vested public interest on the effect the merger would have on wireless competition, economic growth and technological innovation within the state,” Craig Delsack, lawyer specializing in business, technology and media, told the E-Commerce Times.

State governments want to see competition and innovation flourish, so it’s natural that a lawsuit with antitrust concerns would spark the interest of attorneys generals hoping to keep their states consumer- and business-friendly.

California State Attorney General Kamala D. Harris said the merger would hinder consumer choice, contrary to California’s goal of creating a “vibrant technology sector.”

In a troubled economy crippled with unemployment, however, other states believe AT&T’s promise that the merger would create jobs and have offered public support to the acquisition.

“It is not unusual for state attorneys general to participate in DoJ merger review proceedings or court filings. At the same time, we appreciate that 11 state attorneys general and hundreds of other local, state and federal officials are publicly supportive of our merger,” an AT&T spokesperson told the E-Commerce Times in a statement provided by company spokesperson Saman Asheer.

The spokesperson noted that other public and federal officials offered public support for the merger, including attorneys general from Alabama, Arkansas, Georgia, Kentucky, Michigan, Mississippi, North Dakota, South Dakota, Utah, West Virginia and Wyoming.

Arkansas Attorney General Dustin McDaniel said the bipartisan group argued for the merger because of its economic benefits and to provide AT&T with the spectrum capacity it claims it needs for higher quality, speedier service and the economic benefits, including job creation.

A group of Democratic members of Congress — many of whom received campaign contributions from AT&T — similarly wrote President Obama last week in support of the merger on the grounds it would almost immediately create jobs. Their letter reminded the president of his speech to Congress asking to pass his recently proposed jobs bill, stating this merger could create just the type of employment he desires.

States Support Mostly Symbolic

Plenty of lawmakers and policy advisers have weighed in on the merger, and public opinions from high-profile leaders give certain arguments more weight and could lead to either side giving up more in a settlement.

“The states don’t have the power to block an approved DoJ deal — it is more that their arguments can hopefully persuade the federal regulators and get better concessions from AT&T in their attempt to close a merger deal.

Of course, a state could file its own antitrust lawsuit or come up with an argument that that the DoJ didn’t put together, but since antitrust suits are common, that is unlikely.

“The states joining might have an impact on AT&T’s defense if a state proposes a rational argument that the DOJ didn’t think of. But this merger is not de-novo, there is a plethora of anti-competitive arguments [and] challenges that AT&T would have to overcome,” said Delsack.

A court date is still not set for the trial. AT&T is pushing for a date in January, while the U.S. is hoping to hold off until March. On Sept. 21, a hearing will be held to discuss settlement options.

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Intuit’s $12B Mailchimp Purchase Breathes New Life Into Email Marketing

Intuit on Monday announced an agreement to acquire Mailchimp, a global customer engagement and marketing platform for small and mid-market businesses, for $12 billion in cash and stock advances. The purchase could be the linchpin that thrusts the mostly financial software company into solving more fertile mid-market business challenges for its customers.

The planned acquisition is part of Intuit’s mission to become an AI-driven expert platform. With the acquisition of Mailchimp, Intuit will accelerate two of its previously-shared strategic big bets: to become the center of small business growth and to disrupt the small business mid-market, said the company in its announcement.

Intuit’s acquisition of Mailchimp sends a great message to all entrepreneurs around the globe that venture capital is not always necessary, observed Michael Kawula, co-founder of CBA, a marketing agency for YouTube monetization. Mailchimp is a bootstrapped success story that has not raised any outside venture capital.

“This is a very clever growth strategy for Intuit, who wants to get in front of SMBs, which is difficult and expensive. Similar to HubSpot’s recent purchase of The Hustle newsletter, a much smaller acquisition, this also is brilliant,” he told the E-Commerce Times.

The acquisition marks a significant impact in industry, according to Osiris Parikh, sales marketing manager at Lilius. He also sees the deal as another reminder that email marketing is not dead — and data is power.

“Intuit has made a strong move to broaden its portfolio and become a leader in catering to the needs of SMBs. It is also a great story of success during Covid-19,” he told the E-Commerce Times.

Deal Basics

Intuit provides a global technology platform that makes TurboTax, QuickBooks, Mint, and Credit Karma. Intuit and Mailchimp will offer an innovative, end-to-end customer growth platform that allows customers to get their business online. It will also enable them to manage marketing, customer relationships, payment processes, and access insights and analytics, along with optimizing their cash flow and staying compliant with experts at their fingertips, according to Intuit.

Key to this process is Intuit’s ability to enable businesses to combine their customer data from Mailchimp and QuickBooks’ purchase data to get the actionable insights they need to grow and run their businesses with confidence.

“We’re focused on powering prosperity around the world for consumers and small businesses. Together, Mailchimp and QuickBooks will help solve small and mid-market businesses’ biggest barriers to growth, getting and retaining customers,” said Sasan Goodarzi, CEO of Intuit.

Mailchimp brings to Intuit technology at scale along with global customer reach.

Founded in Atlanta, in 2001, Mailchimp began by offering email marketing solutions. The company evolved into offering customer engagement and marketing automation processes fueled by an AI-driven technology stack. Mailchimp’s data and technology spans 70 billion contacts and more than 250 rich partner integrations. Its AI-powered automation at scale fuels 2.2 million daily predictions.

“Over the past two decades, we have vastly expanded and evolved Mailchimp’s platform to help millions of small businesses around the world start and grow,” said Ben Chestnut, CEO and co-founder of Mailchimp.

Why Mailchimp’s Worth It

While the email marketing sector is pretty crowded, Mailchimp stands out in terms of size and scope. The company reportedly has 13 million total global users, 2.4 million active monthly users, and 800,000 paid customers, noted Charles King, principal analyst at Pund-IT.

“Plus, half of its customers are outside of the U.S. Additionally, while people tend to focus on the mass/might of large enterprises, small businesses are really the heart and soul of most economies,” he told the E-Commerce Times.

The acquisition likely represents a lucrative opportunity for Intuit to integrate Mailchimp data with QuickBooks and provide greater analytical capabilities to customers. The synthesis of financial and marketing data in this case provides valuable and actionable insights about an organization’s clients, added Lilus’ Parikh.

“It’s also a great diversification of offerings to centralize SMB operations through one platform and benefit from Mailchimp’s established user base,” he said.

Another supporting factor for Intuit’s interest in Mailchimp is the renewed stature of email, according to Elice Max, co-owner of EMUCoupon and someone who has been involved in online marketing for eight years.

“Email marketing has made a comeback in recent years. With increased digitization caused by the pandemic, all digital mediums including email have gained a renewed importance,” she told the E-Commerce Times.

Email Marketing’s Resurgence

Technology giants are looking to build more integrated and holistic solutions. Microsoft recently bought Clipchamp, a video production tool. Both companies are looking to build platforms for the new tech-savvy SMBs, Max Suggested.

“More than anything, it means a renewed confidence in the field. Experts have been talking about the death of email marketing for a while now. But a $12 billion acquisition by a big player like Intuit means email promotion is alive and kicking,” she said.

Another factor is Intuit keeping its eye on the ball. It is important to remember the significance of Mailchimp as the pioneer in marketing automation and email marketing in particular.

“Intuit is looking to make a statement that it wants to become more than a financial software company,” Max observed.

QuickBooks Synergies

One of the motivations that lies behind Intuit’s purchase of Mailchimp is its desire to lead a revolution in the CRM capabilities of SMBs, according to Will Ward, CEO of Translation Equipment HQ . Think about the effect the pandemic has had on the popularity of remote work and the amount of remote SMBs being established.

“You would expect there to be a lot of growth potential here in the next few years. With Mailchimp and QuickBooks, Intuit is providing an end-to-end customer growth platform, and with around $20 billion invested already its belief in SMBs is evident,” Ward told the E-Commerce Times.

Like any other system that handles transactions such as orders and payments, you need to work closer to the actual customer channels. With the Intuit e-commerce product, launched about a year ago, this seems like a natural step by adding marketing automation and reaching out with its e-commerce offering to the MailChimp customer base, suggested Johan Liljeros, general manager and senior commerce advisor, North America for Avensia.

“The acquisition has added synergies between the platforms while still being able to operate as independent platforms. Looking at Intuit’s offerings, it appears they are moving towards expanding [into] digital transactional experience,” he told the E-Commerce Times.

Final Thoughts

Email marketers should be ready for disruption along with other business services providers. Intuit has been both savvy and aggressive in the way it built its business, effectively becoming the 800-pound gorilla of small business accounting and tax solutions, according to Pund-IT’s King.

“With that kind of ally behind Mailchimp, life is going to become a whole lot more ‘interesting’ for other email marketers,” he predicted.

The Intuit-Mailchimp deal should offer Intuit customers significant benefits, such as new solutions and services for bolstering their businesses. At the same time, the deal highlights the fact that old technologies can continue to be vital and dynamic.

“For years, many have claimed that email is dead or dying and quickly being replaced by whatever the tech du jour happens to be. Mailchimp — and now Intuit — beg to differ,” King quipped.

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

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