The Justice Department is suing to block a $ 2.2 billion book publishing deal that would have reshaped the industry, saying the consolidation would hurt authors and, ultimately, readers.
German media giant Bertelsmann’s Penguin Random House, already America’s biggest publisher, wants to buy New York-based Simon & Schuster, whose authors include Stephen King, Hillary Clinton and John Irving, from television and film company ViacomCBS .
The Justice Department filed an antitrust complaint in the District of Columbia United States Court on Tuesday in connection with the Biden administration’s first major antitrust action, saying the deal would allow Penguin Random House “to exercise an inordinate influence on books published in the US and how much authors are paid for their work.
âIf the world’s largest book publisher is allowed to acquire one of its biggest rivals, it will have unprecedented control over this important industry. American authors and consumers will pay the price for this anti-competitive merger – less progress for authors and ultimately less books and less variety for consumers, âAttorney General Merrick Garland said in a statement.
The Simon & Schuster purchase would reduce the so-called Big Five, which dominate US publishing and include HarperCollins, Hachette Book Group and Macmillan, to four.
The deal has raised concerns among writers and rival publishers. The Authors ‘Guild, an organization of writers, said it opposed the acquisition because there would be less competition for authors’ manuscripts.
In a statement, the editors said they would fight the lawsuit and blocking the deal would hurt the authors. “The DOJ lawsuit is wrong on facts, law and public policy,” said Daniel Petrocelli, attorney for Penguin Random House. “It is important to note that the DOJ has not found, or alleged, that the combination will reduce competition in the sale of books.”