Radio Waves: Can the Definition of 'Monopoly' be Flexible?

February 22, 2007

Tyler Baker, co-chair of Fenwick & West's Antitrust and Unfair Competition Group, was recently quoted in a San Francisco Chronicle story entitled, "Radio Waves: Can the Definition of 'Monopoly' be Flexible?"

Sirius Satellite Radio and XM Satellite Radio Holdings are seeking approval to merge in order to promote the expansion of satellite radio. However, the proposed merger raises serious antitrust questions. In order to gain approval, the companies are focused on the Justice Department that they are competing not just with terrestrial and online broadcasts, but also the fast-growing trend of people downloading radio shows and other programming into mobile devices such as iPods.

"If you define this market as just being satellite radio, then you have a merger to monopoly," said Baker, who heads the antitrust litigation group at the Mountain View law firm Fenwick & West. "That's as bad as it gets from a competitive perspective."

To win approval for the deal from the DOJ and FCC, Sirius and XM must prove that consumers view the market as larger than satellite radio and that market forces are a strong deterrent to a satellite-radio monopoly holding too much sway over consumers. They may also argue that without a monopoly-producing merger, the two companies will fail and then there would be no satellite radio.

Read the entire article by San Francisco Chronicle reporter David Lazarus.