Justice Department gives thumbs up to satellite radio merger more than one year after it was first announced.
In its decision, the Department of Justice determined that an XM-Sirius merger was not anti-competitive. The Justice Department argued that other media companies such as Clear Channel (CCU, Fortune 500), CBS (CBS, Fortune 500), or even Apple (AAPL, Fortune 500) with its iTunes software and iPod music player served as alternate options for music and media customers.
The Department of Justice did not place any conditions on the merger.
“Since we determined that there was no competition between the companies, we did not need to set any conditions as such,” said Assistant Attorney General Thomas Barnett during a conference call with reporters Monday afternoon.
But the Federal Communications Commission must also approve the deal. The FCC has yet to make a decision on the merger and it could decide to place conditions on the deal. A spokesperson for the FCC was not immediately available for comment.
Since Sirius and XM are still awaiting approval from the FCC, it is unclear exactly what a merger would mean for consumers. Both companies charge their customers a $12.95 per month subscription fee for their most basic packages. Some have feared that if Sirius and XM are allowed to merge, the two companies would raise the monthly price.
However, the companies said last year that they would be willing to offer a so-called “a la carte” price plan where consumers could pick certain packages for less money.
The merger would combine the nation’s only two satellite radio companies and create a company with about 14 million subscribers. It would bring together Sirius’ most well-known content, including shock jock Stern and National Football League games with XM’s Major League Baseball as well as programming from Oprah Winfrey.
Currently, subscribers for either Sirius or XM can only receive broadcasts from one of the two services with their satellite radios. But in a statement Monday, XM reiterated that radios owned by its current subscribers would not need to be replaced in order to continue receiving programming.