A federal judge has ruled against Penguin Random House’s proposed purchase of Simon & Schuster, agreeing with the Justice Department that the joining of two of the world’s biggest publishers could “lessen competition.”
NEW YORK — A federal judge has blocked Penguin Random House’s proposed purchase of Simon & Schuster, agreeing with the Justice Department that the joining of two of the world’s biggest publishers could “lessen competition” for “top-selling books.” The ruling was a victory for the Biden administration’s tougher approach to proposed mergers, a break from decades of precedent under Democratic and Republican leadership.
Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division praised the decision, saying in a statement that the decision “protects vital competition for books and is a victory for authors, readers, and the free exchange of ideas.” But it was still a dramatic departure from recent history in the book world and beyond. The publishing industry has been consolidating for years with little interference from the government, even when Random House and Penguin merged in 2013 and formed what was then the biggest publishing house in memory.
The DOJ also has been battling American Airlines and JetBlue in an antitrust trial in federal court in Boston, challenging their regional partnership in the Northeast, which the government calls a de facto merger. “I apologize for the passionate language,” Penguin Random House’s global, CEO Markus Dohle, testified after some text messages were displayed.
Penguin Random House will have to pay around $200 million to Paramount should the merger fall through, according to the terms of the proposed sale.
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