This article was published 16 years ago
Shorts

Department of Justice approves XM-Sirius merger

The Department of Justice has closed it’s investigation on the merger of XM and Sirius satellite radio, concluding that the merger will not harm consumers.

After a careful and thorough review of the proposed transaction, the Division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers. The Division reached this conclusion because the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers for several reasons, including: a lack of competition between the parties in important segments even without the merger; the competitive alternative services available to consumers; technological change that is expected to make those alternatives increasingly attractive over time; and efficiencies likely to flow from the transaction that could benefit consumers.

The merger still has to clear the Federal Communication Commission, which the National Association of Broadcasters will lobby heavily to block the merger.  I expect the merger to go through because Reuters is reporting that the FCC is drafting rules to allow the merger to go through, with some conditions.