Sirius and XM announced last year that the companies wanted to merge radio
operations into one large satellite radio provider. It has taken over a year to
find out if the XM/Sirius baby would be stillborn. However, the Justice Department
today gave
its seal of approval for the merger.
"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," said the Department of Justice's Antitrust Division in a statement.
"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."
When Sirius
and XM announced the intention to merge the two companies in February of
2007, the FCC was quick to say that the merger would be unlikely to gain
approval, as it would create one large monopoly for satellite radio users. In
March of 2007, former
Attorney General John Ashcroft and the National Association of Broadcasters
voiced their opinions saying they were very against the merger of Sirius and XM.
The proposed
merger ran into more trouble in March when a patent infringement suit was filed
against both XM and Sirius by Keystone Autonics. Keystone claimed that
technology covered in a patent granted to George Hindman of Keystone Autonics
was used by both companies.
XM
and Sirius issued a statement to DailyTech saying the merger of
the two companies would create more choice for consumers not less. A few months
after that statement XM and Sirius revealed plans
for ala carte services that would allow subscribers to choose programming
from both XM and Sirius line-ups.
The FCC
opened the topic of the XM/Sirius merger to public comment in June of 2007.
While the merger had more than its share of critics, one group that was
vocal in its support for the merger was the Parents Television Council. This
lobbying group said the mergers proposed ala carte programming would allow
parents to block adult content, like Howard Stern, with greater ease.
Now that the merger has been approved, it’s up to XM and Sirius to prove to
consumers that the merger will be a benefit to everyone, not just the satellite
radio providers.