US regulators have sued to block the merger of Penguin Random House and Simon & Schuster, which would have created a mega-publisher in the US books market, in one of the Biden administration’s most significant antitrust moves yet.
Bertelsmann, which owns Penguin Random House, last November struck a $2.2bn deal to acquire Simon & Schuster from ViacomCBS, significantly outbidding Rupert Murdoch’s News Corp in a deal that aimed to merge some of the world’s most popular authors, from EL James and Stephen King to George Orwell and F Scott Fitzgerald.
The justice department alleged that the two companies would control more than two-thirds of the market for acquiring publishing rights after merging, squeezing advances and resulting in “substantial harm to authors of anticipated top-selling books and ultimately, consumers”, according to a lawsuit filed yesterday at Washington federal court.