A lawsuit filed on behalf of approximately 20M subscribers to satellite audio service Sirius-XM is being allowed to proceed. The suit alleges that the company is an illegal monopolistic entity, and that it fraudulently used royalty payments as an excuse to increase its subscription price.
Law firm Grant & Eisenhofer is representing the subscribers in a case being heard by US District Judge Harold Baer in the Southern District of New York. The judge denied a Sirius-XM motion to dismiss the case.
G&E says the defendant didn’t even address its charge that its merger was in the first place a violation of the Clayton Act and the Sherman Antitrust Act, in that it made the surviving entity the one and only company in its field.
The key to the fraud charge is the claim that it is passing along charges it pays for royalties to its customers, and that 100% of this money is used to pay those expenses incurred by the company.
G&E said, “In truth, Plaintiffs allege, the actual fee charged is significantly greater than what Defendant pays in royalty fee increases, and they describe the payment structure in an attempt to show how the Royalty Fees charged to customers are not simply a ‘pass-through.’”
James Sabella, one of the attorneys leading the cases on behalf of subscribers, commented, “This is a key milestone in the subscribers’ suit for compensation and to restore competition in the Satellite Radio market. Sirius XM subscribers can now go forward in proving the company misled them in how it categorized the deal and how it overcharged subscribers. The merger harmed consumers by destroying competition in the Satellite Radio space. We look forward to proceeding with the trial.”