A federal judge has blocked Penguin Random House‘s prospective purchase of Simon & Schuster. The merger would have united two of the country’s largest book publishers.
According to the New York Times, the decision was made Monday in an order by Judge Florence Y. Pan, who heard the case in the United States District Court for the District of Columbia. Pan stated that the merger would “substantially” harm competition in the U.S. market for publishing rights for potential top-selling books. Penguin Random House is the world’s largest book publisher, while Simon & Schuster is the fourth-largest.
After the three-week trial concluded in August, the ultimate decision marks a major win for the Biden administration and its emphasis on antitrust enforcement.
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“We strongly disagree with today’s decision, which is an unfortunate setback for readers and authors, and we will immediately request an expedited appeal,” Penguin Random House said in a statement. “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 believe this merger will be pro-competitive, and we will continue to work closely with Paramount and Simon & Schuster on next steps.”
The high-profile trial was watched closely by the literary world and included testimony from executives of both publishers, who argued that a merger would allow cost-saving opportunities, which would benefit writers.
Authors also testified during the trial, including Stephen King. The acclaimed horror writer, long aligned with Simon & Schuster, argued strongly against the merger, stating that “consolidation is bad for competition” and that “it becomes tougher and tougher for writers to find money to live on.”
Other executives from rival publishers, such as Hachette and HarperCollins, also testified against the deal. The government argued that a merger would result in fewer options for authors to find publishers for their work.
“One entity’s control of almost half of the nation’s anticipated top-selling books threatens competition in multiple ways,” the Justice Department argued in a post-trial brief. “Authors’ advances would fall — advances that they use to pay their bills and that reflect compensation for their work.”
The order to block the deal may indicate stricter enforcement by the Justice Department against future mergers, which could extend beyond the publishing industry to media and tech companies.
