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Antitrust Group Slams Satellite Radio Decision
The American Antitrust Institute on Tuesday slammed the Justice Department's approval of Sirius Satellite Radio's proposed merger with rival XM. The group had urged the agency to conclude that the pairing violates a section of the Clayton Act that requires courts to predict when the effect of a merger "may be substantially to lessen competition, or to tend to create a monopoly."
Justice stated that the merger will not be stopped "because the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers." In doing so, the agency created a higher standard -- replacing "may" with "would" - and focusing only on the effect on prices, AAI said. Other antitrust considerations like diversity, choice, and innovation were "either ignored or shortchanged."
The decision also suggested that Justice officials used a lower standard for alleged efficiencies, accepting them if they "could benefit consumers." "The DOJ should enforce the law that Congress wrote, not the law they prefer," AAI President Bert Foer said.
When it came to market definition, Justice used a broad brush, including a variety of sources of audio entertainment. AAI believed the market should have been more narrowly defined as satellite broadcast radio because it has "many special qualities that set it apart" from other platforms.
As the matter proceeds to the FCC, the antitrust group said it would be "perfectly acceptable" for the Commission to reach a different conclusion from Justice given the different standards and concerns of the agencies.
Posted by Andrew on March 25, 2008 06:18 PM | Permalink
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