U.S. regulators are suing to block a $2.2 billion book publishing deal that would have reshaped the industry, saying consolidation would hurt authors and readers.
German media giant Bertelsmann’s Penguin Random House, already the largest American publisher, wants to buy New York-based Simon & Schuster, whose authors include Stephen King, Hillary Clinton and John Irving, from TV and film company ViacomCBS.
The Department of Justice filed an antitrust suit in the U.S. District Court for the District of Columbia Tuesday, saying the deal would let Penguin Random House “exert outsized influence over which books are published in the United States and how much authors are paid for their work.”
“If the world’s largest book publisher is permitted to acquire one of its biggest rivals, it will have unprecedented control over this important industry. American authors and consumers will pay the price of this anticompetitive merger – lower advances for authors and ultimately fewer books and less variety for consumers,” said Attorney General Merrick Garland in a statement.
The purchase of Simon & Schuster would reduce the so-called Big Five of American publishing — which also includes HarperCollins, Hachette Book Group and Macmillan — to four.
The Authors Guild, a writers’ organization, has said it opposes the deal because it would make it more difficult for authors and agents to negotiate with publishers and lead to less competition for authors’ manuscripts.
In a statement, the publishers said it would fight the lawsuit and blocking the deal would harm authors. “DOJ’s lawsuit is wrong on the facts, the law, and public policy,” said Daniel Petrocelli, a lawyer for Penguin Random House. “Importantly, DOJ has not found, nor does it allege, that the combination will reduce competition in the sale of books.”
The companies say that their publishing imprints will continue to compete against one another for books after the deal closes, and that Penguin Random House is not planning to reduce the number of books acquired.
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