What do organic grocery stores, online ad giants, and satellite radio companies have in common? Just a bunch of regulators who decide whether to approve mega-mergers like Google’s takeover of DoubleClick, XM’s merger with Sirius, and Whole Foods’ acquisition of Wild Oats. Yesterday, Judge Paul Friedman of the U.S. District Court for the District of Columbia rejected the FTC’s attempt to block Whole Foods’ deal. Stifel Nicolaus’ regulatory analysts argue that the ruling is a “modest positive” for Google and the satellite radio companies.
Normally, a grocery store merger wouldn’t have much significance for a tech deal, but Whole Foods’ argument had a lot in common with Google’s and XM’s: Take a broad look at the market to determine competition — not just organic food stores, but all food stores. That’s the same pitch XM makes when it says that it competes just as much with terrestrial radio, Internet radio, MP3 mobile phones, and iPods as it competes with Sirius, and when Google argues that “online advertising” includes more than just banner ads.
“Although the facts in each case are different, we believe the judge’s decision yesterday will give the advocates of the two pending mergers a bit more credibility when they suggest to government officials that their agencies risk an embarrassing defeat if they try to block the deals,” the analysts say.
Yep, we’re feeling pretty good about making the same argument to block GOOG/DCLK and XM/SIRI–FTC.