A Federal Court has blocked Penguin Random House’s acquisition of rival Big Five publisher Simon & Schuster. At press time, Judge Florence Y. Pan’s opinion was not yet public as the parties still need to agree on redactions to protect confidential information, but in a brief two page order Pan enjoined the merger.
“Upon review of the extensive record and careful consideration of the parties’ arguments, the Court finds that the United States has shown that ‘the effect of [the proposed merger] may be to substantially to lessen competition’ in the market for the U.S. publishing rights to anticipated top-selling books,” Pan’s order states. “Accordingly, judgment shall be entered in favor of the Plaintiff and the merger shall be enjoined.”
In a statement, PRH officials said they “strongly disagreed” with the decision and would be requesting an “expedited” appeal.
A US judge has blocked the $2.2bn planned merger of Penguin Random House, the world’s largest book publisher, with rival Simon & Schuster.
Unlike most merger fights, which are focused on what consumers pay, this one focused on authors’ earnings. The government argued that the deal would lead to lower advances for authors who earn $250,000 or more.
Penguin writers include cookbook author Ina Garten and novelists Zadie Smith and Danielle Steele while Simon & Schuster publishes Stephen King, Jennifer Weiner and Hillary Clinton, among others.
The news is a major victory for the Biden administration which has attempted to toughen its antitrust enforcement. The justice department argued the merger would “exert outsized influence over which books are published in the United States and how much authors are paid for their work”.