Judge blocks Penguin Random House from buying rival Simon & Schuster
Horror author Stephen King testified on behalf of the Biden administration in August trial
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Your support makes all the difference.A federal judge has blocked America’s biggest publisher Penguin Random House from buying “Big Five” rival Simon & Schuster following a high-profile trial earlier this year.
Judge Florence Pan of the United States District Court for the District of Columbia, sided with the Justice Department’s claims that the merger of the two companies could “substantially” harm competition in the US book market.
Star horror author Stephen King testified on behalf of the Biden administration in the August trial against the proposed $2.2bn merger.
Penguin Random House told The Independent in a statement that they would appeal the decision.
“We strongly disagree with today’s decision, which is an unfortunate setback for readers and authors, and we will immediately request an expedited appeal,” a company spokesperson said.
“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.
“We believe this merger will be pro-competitive, and we will continue to work closely with Paramount and Simon & Schuster on next steps.”
In August, Mr King, one of the most successful and well-paid writers of his generation, was willing to testify against his own regular publisher, Scribner, part of Simon & Schuster, to argue against more consolidation in the book industry.
“My name is Stephen King. I’m a freelance writer,” he cheekily told the court, before criticising the industry that forced many writers “below the poverty line”.
“I came because I think that consolidation is bad for competition,” he testified. “It becomes tougher and tougher for writers to find money to live on.”
“It’s a tough world out there now. That’s why I came,” he added. “There comes a point where, if you are fortunate, you can stop following your bank account and start following your heart.”
Executives from Penguin Random House and Simon & Schuster testified that combining the companies would result in cost savings and allow them to spend more money on books.
The main argument in the case revolved around the big whales of the publishing industry, books where authors earned more than $250,000 on their advances for titles expected to top bestseller lists.
The DOJ claimed that a potential Penguin Random House - Simon & Schuster juggernaut would control half the market of such blockbuster books in the US.
“They are the only firms with the capital, reputations, editorial capacity, marketing, publicity, sales, and distribution resources to regularly acquire anticipated top-selling books,” DOJ lawyers said in a court filing.
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