The proposed merger of Penguin Random House and Simon & Schuster would crush competition among the publishing industry, the Justice Department argued on the final day of an antitrust trial intending to block the merger that saw testimony from famed author Stephen King.
Justice Department lawyer John Read and Stephen Fishbein, a lawyer for Simon & Schuster, delivered closing arguments Friday in front of U.S. District Judge Florence Pan, who will issue a ruling after both sides file post-trial briefs. The federal government is attempting to block the merger, billed at approximately $2 billion, after President Joe Biden ordered a crackdown on corporate mergers, with the Justice Department claiming the merger amounted to anti-competitive behavior.
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“The merger will reduce the number of players in this market and will clearly exacerbate the risk of coordination in the market,” Read said, according to the Wall Street Journal. “This is not about a love of books. There is no dispute that Penguin will be more dominant than it already is.”
The Justice Department argued the acquisition would create an unprecedented hold over the U.S. book market, thus allowing the companies to control how much authors are paid, which could result in smaller advances for authors and fewer books for readers. The defense countered that the sale would benefit readers, booksellers, and authors by creating a more efficient company that would bring lower prices for books.
The trial took place over the course of three weeks and included testimony from King, who went against his publisher to testify against the merger.
“I came here because I think consolidation is bad for competition,” King said. “That’s my understanding of the book business, and I’ve been around it for 50 years.”
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The acquisition, in which German media company Bertelsmann SE, which owns Penguin Random House, agreed to buy Simon & Schuster from ViacomCBS, was first announced in 2019. The federal government filed a block of the sale last year.
The acquisition would bring the top market from five major companies, which consist of Penguin Random House, HarperCollins, Macmillan, Simon & Schuster, and Hachette, down to four. Penguin Random House is the top publishing company in the United States, and Simon & Schuster is No. 4.
