AMERICAN ANTITRUST INSTITUTE1 CALLS ON DOJ TO FILE LAWSUIT AGAINST THE XM-SIRIUS MERGER
Posted: February 20, 2008 at 7:05 am
Year-Long Review by DOJ Spurs AAI to Call for Immediate Action
(Washington, DC) The American Antitrust Institute today urges the Antitrust Division of the Department of Justice (DOJ) to file a complaint and seek an injunction against the proposed merger of XM Satellite Radio Holdings Inc. and Sirius Satellite Radio. Nearly a year after the proposed merger was announced, the DOJ and the Federal Communications Commission (“FCC”) have compiled an extensive factual record including substantial evidence of anticompetitive harm to consumers and other firms.2 In order to prevent a monopoly in the satellite radio market and the resulting harm to competition, the AAI believes the Antitrust Division of the DOJ must immediately file a lawsuit under Section 7 of the Clayton Act.
The AAI 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 power of the Antitrust Division of the DOJ and the Federal Trade Commission (FTC) to enforce Section 7 of the Clayton Act
plays a critical role in guaranteeing the benefits of a competitive marketplace. Congress enacted Section 7 to prevent mergers and acquisitions that may substantially reduce competition in any relevant market. Congress sought to prevent excessive concentration of power in any market that would lead to higher prices, less service, lower quality, and less innovation. For decades, government enforcement of Section 7 has created a critical bulwark against mergers and acquisitions that would permanently change the marketplace and adversely affect consumers. During the past decade, government antitrust enforcement has protected competition in numerous markets vital to American consumers through federal court cases in enjoining or restructuring a merger.3 In many cases, the government encountered significant litigation
uncertainties, faced well-funded adversaries with strong arguments, was challenged to clarify important principles of law, and had few or no witnesses to support its case. Yet, in each case, the government prevailed.
