Although President Benjamin Harrison signed the Sherman Antitrust Act into law in 1890, intended to limit monopolies, Theodore Roosevelt was the one who used the legislation in his own antitrust campaign by suing 45 companies who were eliminating competition with their businesses.

In his antitrust campaign, Roosevelt managed to break up the Northern Securities Company, a railroad company trust that acted as an example, more than anything, for other monopolies. (A larger, much more conglomerated, and monopolized entity emerged later, neutralizing Roosevelt's attempt.)

Today, antitrust laws are better known as competition laws around the world and are used to breakup companies that are abusing their market power through illegal practices like bid rigging, predatory pricing, price fixing, and/or vendor lock-ins.

One of the most famous antitrust cases was the breaking up of AT&T (T:NYSE) into a long distance company and seven “Baby Bells.”

Now the question appears again: Are competition laws going to strike down the newest attempt at monopolizing a market?

As many of you already know, while the markets were closed yesterday, Sirius Satellite Radio (SIRI:NASDAQ) announced plans to acquire XM Satellite Radio Holdings (XMSR:NASDAQ) for $13 billion, including $1.6 billion in debt. This would give the resulting entity, if approved, 13.6 million total satellite radio subscribers.

Both company's stocks have performed terribly as of late. SIRI has lost 56% of its share value since the end of 2004, currently trading for about $4 per share. SIRI used to be worth nearly $70 per share in 2000!

XMSR is in the same boat. Its stock has lost 60% of its value since 2004, currently trading at almost $16 per share. It was worth $50 per share in 2000.

Regardless of their falling stock prices, Sirius has proven the stronger of the two entities and is starting to take advantage of its position.

SIRI closed 2006 with an 82% increase in subscribers, adding a record 2.7 million subscribers to its client base during Howard Sterns' first year.

Most importantly, SIRI achieved its first quarter ever of positive free cash flow during the fourth quarter, spurring, no doubt, thoughts on acquiring its biggest rival… and adding XM's subscribers to Sirius' books for more revenue.

(Sirius made sure to acknowledge Stern's part in helping to grow its subscriber base, by offering the Stern and his affiliates $82.9 million in stock late last year.)

XMSR, on the other hand, is still weak. In XMSR's third quarter, its revenue rose 57% to $240 million but it still had a net loss (albeit reduced compared to the quarter before) of $84 million.

Both companies officially announce their fourth-quarter and full 2006 results next week.

The companies may be accused of price fixing, as you can pay $12.95 for a subscription to either company's bundle programs. Whether or not the companies merge, you should see a rise in this price to make up for any costs both companies are incurring, as well as to pump up both companies' quarterly and annual sales going forward.

One positive asset of the satellite radio game is the ad revenue they generate. While AM and FM radio stations brought in only $20 billion in ad dollars last year, Sirius and XM brought in $70 million!

Of course, the biggest hurdle these companies need to jump is the fact that these two companies are the only subscription radio services in the country. And by merging, they will be the only one. Monopoly, anyone?

(The only other publicly-traded global subscription station, outside of North America, South Korea and Japan that I could find is WorldSpace Corp. (WRSP:NASDAQ), which also trades for less than $4 per share. Homegrown or not, investors haven't been keen to invest in this business for a while.)

Federal Communications Chairman (FCC) Kevin Martin believes that the barrier to this deal between the satellite giants “would be high” and that as a “merger of equals,” terrestrial radio may oppose the deal.

Both satellite radio companies believe that they are still in a competitive environment whether or not the deal is approved, since they face rising sales of MP3 players and other kinds of car radios.

Forgive me, but that doesn't sound like direct competition to me.

According to a CNNMoney Article, the FCC currently has a rule prohibiting a merger between the nation's only two satellite radio companies. And the Justice Department itself will have to undergo an extensive process in deciding whether this deal breaks antitrust laws.

The companies are resting their hope on investor approval, which will be expected within six months.

I'm going on record right now: I do not believe this merger will be approved. Anyone in his or her right mind should think this deal's a bit sleazy.

Of course, sleazier or not than Howard Stern, is your own to decide.

And now an update on a stock I recommended more than a year ago…

That little company Empire Resorts Inc. (NYNY:NASDAQ) that was interested in building a casino at the Monticello Raceway in the Catskills for the St. Regis Mohawk tribe finally received approval from New York Governor Eliot Spitzer.

The $600 million casino being built by NYNY will be the biggest step the state has taken in nearly 30 years to bring gambling profits to the Catskills. New York will receive 25% of the annual revenues from the nearly 3,500 gambling machines that will be present at the new location. Analysts expect the gambling machines to make at least $100 million on an annual basis.

The Mohawk Tribe agrees to pay the county $20 million a year to offset the impact of the casino in the area.

On the news, Empire Resorts Inc.'s (NYNY:NASDAQ) stock gapped up nearly $2 or 20%, to $12 per share.

I originally spoke about NYNY in June 2005 when it traded for only $5.38. Although we made 38% on half of the holding, and sold the other half at a protective stop loss, I'm happy to see that the company finally gained approval… and that its stock has gained more than 100% in the past few years.