Penguin Random House Blocked From Acquiring Rival Publisher Simon & Schuster
Federal judge rules in favor of Justice Department’s antitrust challenge to planned $2 billion merger
A federal judge on Monday blocked Penguin Random House from acquiring rival book publisher Simon & Schuster for
about $2.18 billion, agreeing with the Justice Department that the planned merger
would unlawfully lessen competition.
U.S. District Judge Florence Pan accepted the Justice Department’s arguments that some writers would likely be harmed if Penguin Random House, the world’s largest consumer-book publisher, was allowed to acquire another of the five largest book publishers in the U.S.
“The Court finds that the United States has shown that the effect of the proposed merger may be substantially to lessen competition in the market for the U.S. publishing rights to anticipated top-selling books,” Judge Pan wrote in a two-page order.
The ruling, which follows an August trial in Washington, D.C., provided a long-awaited court victory for Biden-era antitrust enforcers who had lost a series of recent cases after pledging to take a more aggressive approach against corporate deal making, especially in industries that have become more consolidated.
The losses, including in the healthcare and agriculture industries, had served as a reminder that much of the administration’s antitrust agenda is dependent on persuading the federal judiciary. Justice Department officials were looking to the publishing case as a chance to build fresh, favorable court precedent.
Assistant Attorney General Jonathan Kanter, the Justice Department’s top antitrust official, said the publishing merger would have decreased author compensation and “diminished the breadth, depth and diversity of our stories and ideas.”
Mr. Kanter added: “The decision is also a victory for workers more broadly. It reaffirms that the antitrust laws protect competition for the acquisition of goods and services from workers.”