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Organization Asks DOJ To Sue Against Satellite Merger
Februrary 20, 2008

The American Antitrust Institute (AAI) is asking the U.S. Department of Justice (DOJ) to file a complaint and seek an injunction against the proposed merger of XM and Sirius. The organization believe that "in order to prevent a monopoly in the satellite radio market and the resulting harm to competition...the Antitrust Division of the DOJ must immediately file a lawsuit under Section 7 of the Clayton Act."

The AAI states that it believes the Antitrust Division "would prevail in demonstrating that satellite radio is a relevant product market and the effect of the proposed XM- Sirius merger 'may be substantially to lessen competition, or to tend to create a monopoly” in violation of Section 7.'"

The AAI is urging the DOJ to challenge the merger because satellite radio is the "relevant market" in regards to competition, therefore "this merger is a monopoly" that "would result in higher long-run prices, short-run increases in commercial time, less innovation, and reduced program choices for subscribers."

They add, "Simply because duopolists have learned how to comfortably avoid competition, they should not be given a free ticket to permanently extinguish competition through a merger. The most profound effects of this merger may be long-term. It is difficult to quantify the amount of innovation that will not occur if there is one monopolist rather than two rivals each striving to outdo the other, but in a high-tech market this constraint on dynamism could be critical."

The entire statement from the AAI can be read here in PDF format. Yesterday was the one year anniversary of the announcement of the satcaster merger.




 
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