Monopoly? Not! [9:29 am]
And waterboarding isn’t torture, either: Justice Dept. Approves XM Merger With Sirius
The Justice Department’s antitrust division announced Monday that it approved the merger after determining that prices were not likely to rise, in part because of competition from other program sources, like high-definition radio as well as iPods and other MP3 players that can be connected to home or car audio systems. The deal, the agency said, was unlikely to hurt competition or consumers.
“In several important segments of their business, with or without the merger, the parties simply do not compete today and therefore the merger would not be eliminating any competition between them,” Thomas O. Barnett, assistant attorney general, said in announcing the decision.
In other segments of the market, XM and Sirius compete fiercely and, according to their balance sheets, unprofitably; both companies are saddled with debt.
It took some doing — and more than a year of “investigation” — for the Justice Department to come up with its undisclosed evidence and tortured logic to justify this strikingly anti-consumer decision. As precedent, it could be used to justify the merger of ABC with both CBS and NBC, Clear Channel with the Bonneville radio network or even Coke with Pepsi. The message it sends to business executives is clear: If you find yourself in a tough competitive environment, the best strategy is not to find a way to offer better products and services at a better price, but rather to call your investment banker and negotiate a truce with your biggest rival.