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DOJ Asks Judge To Block Publisher’s Mega-Merger

By  |  August 19, 2022
Merger

On Friday the US Justice Department urged a US judge to block a $2.2 billion merger of two of the “Big Five” book publishers. The DOJ claims “competition matters” and said the industry should not be treated differently from others.

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    The Justice Department last year sued to stop Penguin Random House, the world’s largest book publisher and owned by German media group Bertelsmann SE & Co KGaA, from buying rival Simon & Schuster from Paramount Global.

    US District Judge Florence Pan is expected to issue a written decision in the coming months after both sides file post-trial briefs.

    The largest five publishers control 90% of the market, and the combined company would control about half of it, the government said.

    “This is not about a love of books,” Justice Department lawyer John Read said in court. “There is no dispute that Penguin will be more dominant than it already is” if the merger succeeds.

    Read said it is extremely difficult for small rivals to make inroads when the largest five publishers hold 90% of the market. “Even Amazon has not succeeded,” Read said of the online retailer which has scaled back publishing ambitions.

    The government argued that the deal would lead to lower advances for authors who earn $250,000 or more, rather than citing the typical reasoning that consumers would pay more.

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