Department Of Justice Waves On XM-Sirius Merger

    March 25, 2008

The Department of Justice took long enough to make up its mind; both "no" and "yes" are pretty short words.  But in regards to the XM-Sirius merger, the DoJ finally landed on a drawn-out version of the latter.

XM-Sirius Merger Decision
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"[T]he evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and . . . the transaction therefore is not likely to harm consumers," according to a formal statement issued by the government entity.

Granted, the satellite radio market will be wrapped up.  Yet the DoJ took "AM/FM radio, HD Radio, MP3 players (e.g., iPods), and audio offerings delivered through wireless telephones" into consideration.  Add CD players and even in-car computers onto the list, if you like, and we wind up with a laundry list of options that should keep the combined XM-Sirius business from getting too strong.

Also, the DoJ believed cost savings will prevent the combined firm from trying to raise prices, anyway.  The two companies should be able to avoid, or at least streamline, a number of expenses after they begin working together.

A successful merger still depends on the FCC’s approval, but that isn’t seen as a major problem.  After more than a year of PR efforts and thumb-twiddling, it may not be too much longer until the companies instead have to focus on equipment compatibility issues.