A place were I can write...

My simple blog of pictures of travel, friends, activities and the Universe we live in as we go slowly around the Sun.



November 01, 2022

Blocks takeover of Simon & Schuster

DOJ blocks Penguin Random House’s takeover of Simon & Schuster

The companies argued that the deal was necessary to compete with both Amazon’s massive book sales operation.

By JOSH SISCO

After three high-profile antitrust losses, the Justice Department notched a win, convincing a judge to block the $2.2 billion merger between Penguin Random House and Simon & Schuster, the first and fourth largest U.S. book publishers.

A much needed win: The ruling by U.S. circuit court Judge Florence Pan will give federal antitrust prosecutors momentum as they pursue other cases, including those against the world’s largest technology companies such as Apple, Google and Amazon. Pan made public the outcome of the trial on Monday, but her opinion remains sealed.

Over the past several months the DOJ lost merger challenges in the healthcare technology, sugar, and defense industries.

The case: While the trial focused on the traditional book publishing market, Amazon loomed large. The companies argued that the deal was necessary to compete with both Amazon’s massive book sales operation and its growing in-house publishing business. The DOJ argued that Amazon’s publishing business pales in comparison to the largest traditional publishing companies.

A focus on labor markets: The case was also notable for DOJ’s focus on harm to writers rather than the ultimate buyers of books. The government argued that the deal would reduce competition between publishers vying to purchase the rights to the most well-known authors. The marquee witness testifying against the deal was the famed novelist Stephen King.

“‘[T]he 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,” Pan wrote in a court filing Thursday.

While Pan’s opinion remains sealed, the DOJ’s victory in a case targeting the labor market, a theory with relatively little precedent in court, will likely give it momentum for more aggressive legal theories in future cases.

“Today’s decision protects vital competition for books and is a victory for authors, readers, and the free exchange of ideas,” said DOJ antitrust head Jonathan Kanter in a statement. ”The deal would have reduced competition, decreased author compensation, diminished the breadth, depth, and diversity of our stories and ideas, and ultimately impoverished our democracy.”

“We strongly disagree with today’s decision, which is an unfortunate setback for readers and authors, and we will immediately request an expedited appeal,” said Penguin spokesperson Alexandra Hill 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.”

Simon & Schuster did not immediately respond to a request for comment.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.