Antitrust Concerns Regarding XM and Sirius Merger: An Analysis

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  • Topic: Satellite radio, Sirius Satellite Radio, XM Satellite Radio
  • Pages : 3 (1227 words )
  • Download(s) : 116
  • Published : December 17, 2012
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The proposed merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. is expected to benefit consumers of satellite radio products and services; it conforms to the principles of both the Sherman Antitrust Act and current public policy that address the structure of markets, the conduct of market participants, and the resulting performance of those markets. This document establishes the basis of a position in favor of the merger of the two companies. Antitrust policy is an amalgam of social policy, economics, law, and administrative practice and is concerned with the concentrations of economic and political power within corporations (Baron, 2010). The merger of these two companies poses no threat to these ideals because the merger is rooted in the principles of fair trade, competition, and fair business practices. A review of the merger details include an FCC ruling about the licensing of satellite radio providers as well as a US Department of Justice investigation and statement regarding general antitrust laws, regulations, and practices. The restriction that neither company could hold both licenses, of the only two that were ever issued, was primarily a precaution because of the new type of technology that satellite radio represented (Kaplan, 2007). The ruling was removed by the FCC, giving way for the merger to occur. The license restriction was not instituted on an antitrust basis, and thus is mostly irrelevant to an analysis of the legality of the merger under the Sherman Act. The Sirius and XM merger details pass the antitrust litmus tests of controlling economic power and protecting competition to benefit consumers, substantiated by a US Department of Justice closing statement on the matter.   The combined Sirius/XM companies would not hinder competition, create a monopoly, or negatively impact price controls within the music service delivery industry. This position is evidenced through an elaboration on the key factors of limited future...
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