From The Wall Street Journal:
The Justice Department filed a lawsuit Tuesday that seeks to block Penguin Random House from acquiring rival Simon & Schuster for nearly $2.18 billion, the latest in a series of aggressive antitrust cases brought under the Biden administration.
The department’s complaint, filed in federal court in Washington, D.C., focused not on the prices consumers pay for books, but instead on the competition between publishers to secure rights from authors, especially bestselling ones. The industry paid authors over $1 billion in advances last year.
If the Simon & Schuster deal were permitted, Penguin Random House—already the world’s largest consumer-book publisher as measured by revenue—would hold unprecedented control and outsize influence over which books are published in the U.S. and how much authors are paid, the Justice Department alleged.
“By reducing author pay, this merger would make it harder for authors to earn a living by writing books, which would, in turn, lead to a reduction in the quantity and variety of books published,” the lawsuit alleged.
Attorney General Merrick Garland said the Justice Department’s suit aimed “to ensure fair competition in the U.S. publishing industry” and was part of a broader push to use antitrust enforcement to protect economic opportunity.
Bertelsmann SE, the parent of Penguin Random House, agreed to buy Simon & Schuster from ViacomCBS Inc. last November, a deal that sought to create a publishing behemoth in an industry that has been dominated by five major players, including Simon & Schuster.
The publishers vowed to fight the Justice Department in court and said their deal would improve their efficiency and make titles more widely available for consumers and retailers.
“The publishing industry is, and following this transaction will remain, a vibrant and highly competitive environment,” the publishers said in a joint statement. They said they compete “with many other publishers including large trade publishers, newer entrants like Amazon, and a range of midsize and smaller publishers all capable of competing for future titles from established and emerging authors.”
The deal has faced criticism from writers’ groups, and the lawsuit was quickly welcomed by some authors, including Stephen King, a longtime Simon & Schuster author, who said via email that he was “delighted” by the Justice Department’s merger challenge.
Link to the rest at The Wall Street Journal (Should be a free link, but, if not, PG apologizes for the paywall, but hasn’t figured out a way around it.)