SOME DYNAMICS OF HIGH-TECH MERGER ANALYSIS IN GENERAL AND WITH RESPECT TO XM-SIRIUS

Horizontal merger evaluation is heavily reliant on market definition. An SSNIP framework formats the analysis, and demand elasticity evidence used to apply the test is often sparse, as is often found in high-technology industries. This paper examines other sources of evidence that reveal the dynamic...

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Bibliographic Details
Published in:Journal of competition law & economics 2008-09, Vol.4 (3), p.753-773
Main Author: Hazlett, Thomas W.
Format: Article
Language:English
Subjects:
Acquisitions & mergers
Antitrust
Competition policy
Digital audio players
Digital music
Economic analysis
Elasticity of demand
High tech industries
Market structure
Radio stations
Radios
Regulatory approval
Satellite radio
Studies
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Summary:Horizontal merger evaluation is heavily reliant on market definition. An SSNIP framework formats the analysis, and demand elasticity evidence used to apply the test is often sparse, as is often found in high-technology industries. This paper examines other sources of evidence that reveal the dynamics of market structure, data that are also probative in the evaluation of competitive effects. These sources include capital valuations of firms, financial event studies, and the public positions taken with respect to the merger by interested parties. Such evidence is examined in the XM-Sirius merger (2007-08) and shown-in two of the three instances-to be relatively informative in merger welfare analysis.
ISSN:1744-6414
1744-6422
DOI:10.1093/joclec/nhn024