The Wall Street Journal is reporting that the U.S. Department of Justice has begun a preliminary review of potential anti-competitive practices among large telecom companies such as Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T).
One area the Justice Department may investigate is whether wireless providers are hurting small competitors by tying up popular phones with exclusive agreements. Think AT&T as the exclusive provider of service for Apple Inc.'s (NASDAQ: AAPL) iPhone in the U.S.
Spokespersons for AT&T and Sprint Nextel Corp. (NYSE: S), which has an exclusive agreement to sell the Palm Inc. (NASDAQ: PALM) Pre, defended exclusive handset agreements as pro-competitive, saying they not only spurred competition but also helped companies collaborate on new features.
The review is in its very early stages, said sources familiar with the matter, and it's not a formal investigation of any particular company.
This new scrutiny is seen as an indication of the Obama administration's desire to reassert the government's role in policing monopolistic and anti-competitive practices by powerful companies. Enforcement of the Sherman Antitrust Act was minimal under the Bush administration.
Other areas that may be coming other increased scrutiny include agriculture and health care. The Justice Department is already looking into Google Inc.'s (NASDAQ: GOOG) settlement with authors and publishers in its book search product.
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