US moves to block merger of book publishing powers

Washington, Nov 2 (AFP/APP):The US Justice Department filed a lawsuit Tuesday to block a tie-up between two American book publishing powers it says will reduce competition and harm authors and consumers.

Penguin Random House, the largest publisher in the world, last year announced plans to buy rival Simon & Schuster, which the Justice Department said would allow it to “exert outsized influence” over the industry.

“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,” Attorney General Merrick Garland said in a statement.

Noting that only five firms control the US publishing industry, Garland said: “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.”
US media group ViacomCBS in November 2020 announced the deal to sell its Simon & Schuster unit to Penguin Random House, a subsidiary of German company Bertelsmann, for $2.2 billion.

The Justice Department said the deal would undermine competition, allowing the companies to control close to half the market for acquiring publishing rights and harming smaller, independent publishers that cannot pay top dollar to authors, while writers will have less leverage.
The statement notes that Penguin Random House in its own documents “views the US publishing market as an ‘oligopoly'” and aims to “‘cement’ its position as the dominant publisher in the United States.”

In a memo to staff, Simon & Schuster chief executive Jonathan Karp said the companies “strongly disagree with the DOJ that this transaction will harm competition.”
“Penguin Random House is determined to fight vigorously to bring this transaction to fruition and we will be doing all we can to help in those efforts,” he said.

Big-name writers on the roster at Simon & Schuster include Stephen King and Doris Kearns Goodwin, while Barack and Michelle Obama and John Grisham have had books published by Penguin Random House.