Wednesday, February 28, 2007

Sirius choices

Sirius and XM Radio want to merge and they are being grilled on anti-trust grounds.

It is true that XM and Sirius are competitors, and through a merger, consumers will go from having two satellite radio stations to one. Traditionally, anti-trust provisions kick-in when a reduction in consumer choice would lead to less consumer welfare. It can be difficult, though, to determine what the "market" to compare is. While it is true that, post-merger, consumers will now only have a single choice in the satellite radio world, they still have plenty of non-satellite choices. Non-satellite radio is probably a close enough substitute to satellite radio for the merger to pass regulatory muster.


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