On Tuesday, November 2, the Biden Administration issued an official lawsuit against Big Five publisher Penguin Random House, in an effort to bar the company’s intended merger with rival publishing giant Simon & Schuster. Penguin Random House is currently the largest publishing company in the United States, operating more than 300 imprints and issuing 15,000 new releases a year, with Simon & Schuster not far behind them. The $2.18 billion purchase of Simon & Schuster would further cement Penguin Random House’s status as the dominant leader in the publishing industry, as well as enable an obvious monopoly over book acquisitions and sales.
Attorney General Merrick Garland issued a statement regarding the lawsuit from the Department of Justice: “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.”
Representatives from Penguin Random House ensured the intent of the merger was never about maintaining industry control, but rather an economically conscious decision meant to help authors, not harm them. They claim to have no plans to reduce the number of books they acquire or the amount they pay for them.
This is one of several corporate mergers the federal government has blocked with anti-trust laws this year. A previous high-profile example is the blocked plan to consolidate operations between JetBlue and American Airlines in the Northeast. The DOJ’s case against Penguin Random House breaks precedent with previous anti-trust lawsuits in that it focuses not only on how the merger would affect consumers with the increase in book prices, but also how it would affect authors, who are functionally workers for the company.
Currently, Penguin Random House intends to contest the lawsuit, hiring Daniel Petrocelli, the defense attorney responsible for successfully challenging the Department of Justice’s lawsuit against AT&T during their own $100 billion merger with Time Warner in 2018.
In anticipation of these upcoming legal proceedings, authors and industry employees alike anxiously peek out from their books, awaiting a more concrete outcome.
Simon & Simon chief executive, Jonathan Karp, is quoted in a statement meant for reassurance: “For all of us, this news is unsettling: Nobody likes to work in an atmosphere of uncertainty. We will carry on as the creative and industrious jewel of the publishing industry that made us attractive to buyers in the first place.”