Are Businesses Slaves to Consumers? 
March 5, 2007

Irvine, CA--Few eyebrows were raised when FCC chairman Kevin Martin said recently that Sirius and XM will only be permitted to merge if they can "demonstrate that consumers would clearly be better off--with both more choice and affordable prices." But "Sirius and XM have every moral right to combine companies and, if the new company judges it profitable, to raise prices," said Dr. Yaron Brook.
 
"A basic principle of a free market is free, voluntary exchange. This means that buyers and sellers are free to offer and accept whatever terms they mutually choose. If a company decides that its profits are too low or, in the case of Sirius and XM, if it is losing money, it has every right to raise prices if it thinks customers will pay them. If the new satellite radio company charges prices that consumers judge as too high, they have every right to take their dollars elsewhere. But they have no right to have the government dictate what prices businesses can charge or how many separate businesses must sell a given product.
 
"There is no legitimate reason for government to interfere in the market on behalf of consumers at the expense of producers--or vice-versa, as in protectionist policies that subsidize businesses at the expense of consumers. The government should be neutral towards all its citizens, protecting everyone's rights equally.
 
"Protecting rights is precisely what the FTC is not doing in the case of the Sirius/XM merger. In the name of a fictional 'right' of consumers to $13-a-month satellite radio and to two satellite radio choices, it is threatening to deprive two innocent businesses of their right to run their businesses as they see fit. We must stop treating businesses as slaves of consumers, and return to a truly free market."

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