Judge blocks Penguin Random House-Simon & Schuster merger
NEW YORK >> A federal judge has blocked Penguin Random House’s proposed purchase of Simon & Schuster, agreeing with the Justice Department that the joining of two of the world’s biggest publishers could “lessen competition” for “top-selling books.” The ruling was a victory for the Biden administration’s tougher approach to proposed mergers, a break from decades of precedent under Democratic and Republican leadership.
U.S. District Court Judge Florence Y. Pan announced the decision in a brief statement Monday, adding that much of her ruling remained under seal at the moment because of “confidential information” and “highly confidential information.” She asked the two sides to meet with her Friday and suggest redactions.
Penguin Random House quickly condemned the ruling, which it called “an unfortunate setback for readers and authors.” In its statement Monday, the publisher said it would seek an expedited appeal.
Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division praised the decision, saying in a statement that the decision “protects vital competition for books and is a victory for authors, readers, and the free exchange of ideas.”
He added: “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.”
Pan’s finding was not surprising — through much of the 3-week trial in August she had indicated agreement with the Justice Department’s contention that Penguin Random House’s plan to buy Simon & Schuster, for $2.2 billion, might damage a vital cultural industry.
But it was still a dramatic departure from recent history in the book world and beyond. The publishing industry has been consolidating for years with little interference from the government, even when Random House and Penguin merged in 2013 and formed what was then the biggest publishing house in memory. The joining of Penguin Random House and Simon & Schuster would have created a company far exceeding any rival and those opposing the merger included one of Simon & Schuster’s signature writers, Stephen King, who testified last summer on behalf of the government.
King tweeted Monday that he was “delighted” by the ruling, adding: “The proposed merger was never about readers and writers; it was about preserving (and growing) PRH’s market share. In other words: $$$.”
The Biden Justice Department has been pushing forward with aggressive enforcement of federal antitrust laws that officials say aim to ensure a fair and competitive market.