Justice Dept. Approves XM/Sirius Merger

Ripit writes "Just yesterday the Justice Department approved the merger of Sirius Satellite Radio and XM Radio, a Sirius takeover to the tune of $5 billion. The transaction was approved without conditions, despite opposition from consumer groups and an intense lobbying campaign by the land-based radio industry. 'In explaining the decision, Justice officials said the options beyond satellite radio -- digital recordings, high-definition radio, Web radio -- mean that XM and Sirius could merge without diminishing competition. "There are other alternatives out there," Assistant Attorney General Thomas O. Barnett said in a conference call. "We just simply found that the evidence didn't indicate that it would harm consumers."'"

Comments

Re:Umm... what other Satellite Radio is there?

[pnewhook]

The issue has little to do with what competition remains within satellite radio, but whether there remains competition. Satellite radio competes with broadcast radio and a number of other formats, so the merger does not remove competition, but makes the combined company more efficient and less likely to lose money.

Both XM and Sirius are bleeding money right now and that can't last forever. If the the industry allowed them both to go under that would counterproductive to helping competition.