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Media News

Florida customer sues Sirius XM Radio on pricing

* Satellite radio accused of deception

* Customer seeks class action status and damages

NEW YORK, Dec 7 (Reuters) - A customer of Sirius XM Radio Inc SIRI.O sued the U.S. satellite radio company on Monday, saying it deceptively increased prices in breach of subscriber contracts.

The lawsuit, filed in Manhattan federal court, said that since a July 2008 merger of Sirius and rival XM Satellite Radio, the only two satellite radio providers in the United States, monthly charges had risen by nearly 30 percent for certain subscribers with multiple accounts.

“Since the merger, Sirius XM has abused its monopoly power by increasing prices above competitive levels, breaching subscriber contracts, and making false and misleading statements to subscribers and the public,” said the complaint by Carl Blessing, a resident of Florida, who is seeking class action status and unspecified damages.

A representative of Sirius could not immediately be reached for comment.

Sirius has left its core rate of about $13 a month unchanged, a condition to which Sirius and XM agreed with federal regulators in order to close their merger.

In March it increased its fee for users with additional subscriptions to $8.99 per radio per month from $6.99 per month. It also started charging for access to Sirius XM content over the Internet, which previously had been free to subscribers.

The lawsuit said that although the Federal Communications Commission approved the merger and acknowledged the monopoly, the company was bound to comply with competitive pricing and other commitments favorable to the consumer.

It also cited an increase to 28 percent from 10 percent in a “U.S. music royalty fee” for musicians, record companies and music publishers.

The lawsuit argued that a subscriber with one additional radio who had previously had free Internet access was now paying $27.88 per month compared with $19.94 per month, an increase of 40 percent.

The case is Carl Blessing v Sirius XM Radio, U.S. District Court for the Southern District of New York, No. 09-10035. (Reporting by Grant McCool and Franklin Paul; Editing by Steve Orlofsky)

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