A Federal Court has blocked Penguin Random House’s acquisition of one of its principal rivals, Simon & Schuster. The ruling by choose Florence Y. Pan was introduced late within the day on October 31, however the full order is quickly sealed to guard confidential info. The case has been watched carefully by the publishing trade — which has already seen intensive consolidation within the final twenty years — and past.
A short two-page doc was launched by the District Court for the District of Columbia, stating that “Upon review of the extensive record and careful consideration of the parties’ arguments, the Court finds that the United States has shown that ‘the effect of [the proposed merger] may be to substantially lessen competition’ in the market for the U.S. publishing rights to anticipated top-selling books.”
Penguin Random House has already introduced that they plan to enchantment the ruling and officers launched the next assertion:
“We strongly disagree with today’s decision, which is an unfortunate setback for readers and authors, and we will immediately request 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 believe this merger will be pro-competitive, and we will continue to work closely with Paramount and Simon & Schuster on next steps.”
The Justice Department then again has praised the ruling blocking the $2.2 billion acquisition, stating that the choice “protects vital competition for books and is a victory for authors, readers, and the free exchange of ideas. The proposed merger would have reduced competition, decreased author compensation, diminished the breadth, depth, and diversity of our stories and ideas, and ultimately impoverished our democracy.” Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division additionally known as it “a victory for workers more broadly.”
The acquisition by Penguin Random House, the only largest publishing home within the United States, of Simon & Schuster, the fourth largest, was first introduced in November 2020. The merger would have created a publishing firm that managed roughly one-third of the publishing enterprise. The Department of Justice sued Penguin Random House over the proposed acquisition in November 2021 and it went to trial in August 2022. The trial was watched carefully by the trade and officers at Penguin Random House, officers on the different Big Five publishers, literary brokers, and authors testified over the course of the trial.
Author Stephen King, who testified towards the merger, has stated in response to the ruling that he’s delighted “that Judge Florence Pan has blocked the merger of Penguin Random House and Simon & Schuster. The proposed merger was never about readers and writers; it was about preserving (and growing) PRH’s market share. In other words: $$$” His feedback have been echoed by many within the trade throughout social media within the wake of the announcement.
To learn extra of our reporting of the proposed merger and the DOJ’s response:
Penguin Random House to Buy Simon & Schuster
Justice Department Sues to Block Penguin Random House Acquisition of Simon & Schuster
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