In an opinion (PDF) handed down earlier today, the US Supreme Court killed a class-action antitrust lawsuit that accused AT&T, Qwest, Verizon, and their predecessor companies of engaging in an anticompetitive conspiracy to hinder local phone and broadband competition.

The plaintiffs had accused the Baby Bells of conspiring to suppress competition in a couple of ways. First, the telecoms had, for the most part, decided to stay out of one another's territory. For example, Denver was (and is) Qwest territory, and none of the other telecoms have tried to move in. Second, the phone companies allegedly failed to give sufficient assistance to new competitors as directed by the Federal Communications Commission and a 1996 law that allowed local phone companies to offer long-distance service if they opened up their local markets to competition.

Originally filed in 2002, a District Court had dismissed Bell Atlantic v. Twombly, ruling that the plaintiffs' evidence of antitrust law violations wasn't sufficient enough to proceed with a lawsuit. The District Court decision was reversed by the US Court of Appeals for the Second Circuit. The Appeals Court held that companies that make similar moves or act in parallel could be subject to antitrust claims if there was also a conclusory allegation of conspiracy. "To rule that allegations of parallel anticompetitive conduct fail to support a plausible conspiracy claim, a court would have to conclude that there is no set of facts that would permit a plaintiff to demonstrate that the particular parallelism asserted was the product of collusion rather than coincidence," read the majority opinion.

In a 7-2 decision, the Supreme Court disagreed with the Appeals Court and threw out the case. Writing for the majority, Justice David Souter said that the mere fact that a conspiracy was conceivable and there was parallel conduct did not form a sufficient-enough basis for the lawsuit to proceed. "We have previously hedged against false inferences from identical behavior at a number of points in the trial sequence," Justice Souter wrote. "An antitrust conspiracy plaintiff with evidence showing nothing beyond parallel conduct is not entitled to a directed verdict."

In the wake of the ruling, it will now be more difficult for consumer groups and others to sue the telecoms over antitrust concerns. Would-be litigants would have to show evidence that an actual conspiracy exists, not just that the existence of one is plausible.

Color the telecoms happy with the Supreme Court's ruling. Verizon released a statement saying that the ruling gives companies the freedom they need to make autonomous decisions on which markets to enter and compete in. "Today's decision is the fifth in a series of Supreme Court decisions establishing that firms will not be challenged under antitrust for making independent choices that benefit consumers," noted Verizon senior VP John Thorne. "Today's decision affirms the freedom to decide when and how to enter new markets."