Justice Department Approves Sirius/XM Merger, FCC Decision Still Looms
The Department of Justice has approved a merger between SIRIUS Satellite Radio and rival XM, over one year after it was first announced. The move has been hotly contested, with the companies arguing their merger would benefit consumers and not create a monopoly (the argument being that consumers aren’t choosing between two satellite radio providers, but rather between terrestrial radio, iPod, etc when looking for music and entertainment choices). Both Sirius and XM have promised a number of benefits to their customers should the merger happen – a la carte service, a variety of channels, etc.
But don’t expect to be tuning into a wonderland of XM-Sirius goodness any time soon though, as the FCC still needs to sign off before this is final – and they’ve been the slowest decision makers of all. Hopefully this won’t drag out for another year, but with the National Association of Broadcasters still fighting valiantly against the merger, who knows…
If you’re the type who likes to read big words, here’s what the D to the O to the J had to say:
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.
You can read the Department’s official release and analysis here.