The Justice Department filed an antitrust lawsuit on Tuesday in an attempt to block a merger between two major book publishing companies.
The sale, announced last year, would see Simon & Schuster acquired by its largest competitor, Penguin Random House, for $2.18 billion.
The DOJ claimed such a merger would be harmful to book sales, authors, and consumers because the companies largely bid on the same books and therefore would hurt competition in a landscape where there are three other publishing houses considered to be part of the “Big Five.”
“If consummated, this merger would likely result in substantial harm to authors of anticipated top-selling books and ultimately, consumers,” the Justice Department said in the lawsuit filed in federal court in Washington, D.C. “Post-merger, the two largest publishers would collectively control more than two-thirds of this market, leaving hundreds of authors with fewer alternatives and less leverage.”
“If the world’s largest book publisher is permitted to acquire one of its biggest rivals, it will have unprecedented control over this important industry,” Attorney General Merrick Garland said in a statement. “American authors and consumers will pay the price of this anticompetitive merger — lower advances for authors and ultimately fewer books and less variety for consumers.”
DESANTIS ANNOUNCES LAWSUIT AGAINST BIDEN FEDERAL CONTRACTOR VACCINE MANDATE
Penguin Random House and Simon & Schuster released a joint statement responding to the lawsuit.
“This is a pro-consumer, pro-author and pro-bookseller transaction,” the statement said. “Blocking the transaction would harm the very authors D.O.J. purports to protect. We will fight this lawsuit vigorously and look forward to PRH serving as the steward for this storied publishing house in the years to come.”
Penguin Random House said the sale would benefit authors under Simon & Schuster by giving the company access to its large distribution centers and printing and shipping warehouses.
This would make it easier to sell the physical books, particularly at local retailers, according to the New York Times. Citing research by Publishers Weekly, the report said the combined amount of hardcover bestselling novels the two companies published in 2019 equaled 49% of the market.
Penguin Random House is the largest publisher in the world, with more than 300 imprints globally and 15,000 releases a year. Although some companies do not allow competition with other imprints within the company, Penguin allows the imprints to compete against each other as long as another publishing company is also bidding.
According to Penguin Random House CEO Markus Dohle, the bidding rule would apply to imprints under Simon & Schuster if they successfully join the company, as long as the sale does not exceed $1 million.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
ViacomCBS, the owner of Simon & Schuster, said it plans to sell the publishing company regardless of whether the sale with Penguin Random House is successful.
