Our good friend Tim Carney is in the DC Examiner today on big business opposition to the proposed XM/Sirius satellite radio merger. Among many other good points, Tim reinforces one of the central problems with antitrust law – a monopoly is in the eye of the beholder. Simply define a market narrowly enough, and anyone can be said to hold a monopoly:
The satellite companies argue that regulators should not look at their combined share of the satellite market, but their combined share of the entire radio market—where the company wouldn’t even be the largest, much less a monopoly. The broadcasters respond that the two markets are separate. They say the satellite companies don’t compete with broadcast companies.
The logical question, then, is: why do the broadcasters care so much about a powerful XM-Sirius if they are not in competition with XM-Sirius? It sure seems the NAB thinks a merger would harm their members, and a collapse of satellite radio would help their members — which provides pretty good proof that satellite radio competes with broadcast radio. Would NAB really pay top-dollar for such a well-connected lobbyist as John Ashcroft if they didn’t think the merger would affect their business?
This issue of how narrowly to define a market for antitrust purposes has also received (hilarious) coverage from America’s finest news source.