Only a few months ago there was an outcry over the XM Sirius merger. It would lead to a dreaded “monopoly” in satellite radio and result in consumers paying higher prices. But the merger squeaked through the FCC having survived an onslaught on lobbying of the Justice Department trustbusters. The satellite behemoth is now on life support and just got a $300 million plus transfusion from Liberty Media. This provides a couple of lessons for antitrust enforcers examining mergers in industries undergoing rapid technology change. First, beware of advocates bearing narrow market definitions trying to convince you that the merging parties will be able to pump up prices. Sometime they are right but more often they’ve ignored fast moving innovation.

The Justice Department understood that real people could switch to iPods if satellite radio got too expensive which is one reason they cleared the deal. Personally, I think Pandora is killer. Second, antitrust enforcers will have to take “failing firm” defenses more seriously during the financial crisis. This pains me to say because historically many of these defenses were bogus. That was then, this is now. Prolonged weak market demand may leave merging as they only way to keep some capacity in an industry.

The next few years we’ll see the intersection of two gales of destruction hitting American industry—the continued gale of creative destruction that started with the IT revolution and is continuing as we move into Web 3.0, whatever that is; and the gale of financial destruction that is pummeling demand. Trustbusters will need to be especially cognizant of industries that are hit by both. That particularly includes the media ones.