A federal judge ruled Monday that a $2.2 billion merger between major publishing rivals Penguin Random House and Simon & Schuster cannot be finalized, saying the deal would significantly thwart competition.
Judge Florence Pan of the D.C. District Court declared the proposed merger would weaken competition “in the market for the U.S. publishing rights to anticipated top-selling books,” Reuters reported. Judge Pan found the merger would have a negative impact on America’s highest-earning authors.
The Department of Justice (DOJ) filed a lawsuit back in November 2021 seeking to stop the deal from going through. Judge Pan’s ruling is the answer to that lawsuit.
Well – this is big news.
Judge Blocks Penguin Random House Merger With Simon & Schuster – Deadline https://t.co/WCzEpRRTAu— Jonny Geller (@JonnyGeller) October 31,
The government attorneys argued the merger should be stopped, as it would lead to less competition for the most sought-after and popular books, as well as amount to lower advances for top authors who earn an excess of $250,000, Reuters reported. (RELATED: Author Of 1619 Project Brings Her Own Book On Plane, Responds After Some People Mock Her)
“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,” U.S. Assistant Attorney General Jonathan Kanter said, according to Reuters.
During hearings in August, the government argued the top five publishers have control of 90% of the book market, Reuters continued. They further argued a merger between the two publishing giants would grant the merged corporate entities the ability to control nearly half the blockbuster book publishing market. Meanwhile, the merger’s competitors would be left vying for smaller portions of the remaining half, the government argued.
An attorney representing Penguin Random House, Daniel Petrocelli, insisted the deal would boast “enormous benefits” for both readers and authors, adding that the two companies would continue to compete against one another despite being owned by a singular corporate entity, Reuters continued. (RELATED: 8-Year-Old Boy Becomes Famous After Genius Scheme At Local Library)
Top-selling author Steven King spoke during the summer hearings and took aim at Petrocelli’s notion of continued competition. “You might as well say you’re going to have a husband and wife bidding against each other for the same house. It’s kind of ridiculous,” King told the court, according to the outlet. (RELATED: Glenn Greenwald Rips Stephen King For Praising Biden’s ‘Minister Of Truth’)
Some authors took to Twitter to express positive sentiment toward the news of the ruling:
I am 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: $$$
— Stephen King (@StephenKing) November 1, 2022
A Penguin Random House author here, and I am absolutely thrilled with this decision. No one publisher should be allowed to have this much control over the book market. https://t.co/0WimRqe41a
— Helaine Olen (@helaineolen) November 1, 2022
Penguin is owned by a German media group called Bertelsmann, while the parent group for Simon & Schuster is Paramount Global. Bertelsmann sought to acquire Simon & Schuster.
Representatives for Penguin Random House said the decision was “unfortunate,” adding the publishing giant is poised to request an expedited appeal, according to Reuters.