In a victory for the Biden administration, which has pushed to stretch the boundaries of antitrust enforcement, a federal judge on Monday denied Penguin Random House’s request to acquire Simon & Schuster, a competitor publisher.
Penguin Random House intends to appeal the decision, which follows a three-week trial and would have a substantial influence on the publishing sector.
The case is seen as establishing precedent for all future mergers and acquisitions under the Biden administration. The biggest book publisher in the US is Penguin Random House, while the fourth biggest is Simon & Schuster.
The Department of Justice has effectively demonstrated that the proposed $2.2 billion merger might “significantly… reduce competition in the market,” District Court Judge Florence Y. Pan stated in her order.
According to the New York Times, experts from the two publishers testified throughout the trial that the combination would reduce expenses and free up more funds for book purchases.
The Department of Justice, author Stephen King, and executives from other significant publishing companies argued against it, arguing that it would hurt aspiring authors, reduce the variety of novels published, and result in reduced author advances.
In a statement, Assistant Attorney General Jonathan Kanter of the DOJ’s Antitrust Division said that today’s judgment “protects crucial competition for books and is a triumph for authors, readers, and the free exchange of ideas.”
Kanter continued, “The ruling is also a victory for workers in general.” “It underscores that competition for the purchase of products and services from workers is protected by the antitrust laws.”
Penguin Random House issued a statement saying, “We strongly disagree with today’s ruling, which is a terrible setback for readers and authors, and we will immediately pursue an expedited appeal.”
“As we demonstrated throughout the trial, the Department of Justice’s focus on advances to the world’s best-paid authors instead of consumers or the intense competitiveness in the publishing sector runs contrary to its mission to ensure fair competition.
We are confident that this merger will benefit consumers, and we will keep collaborating closely with Paramount and Simon & Schuster on the next phases.
In separate statements, Paramount and Simon & Schuster expressed unhappiness with the decision and stated that the parties were considering their options, which included “an accelerated appeal.”