A US federal judge on Monday ruled to block the $2.2bn merger of Penguin Random House and Simon & Schuster, halting the creation of a colossus in the US books sector and handing a victory to antitrust enforcers.
Florence Pan, a judge in the US district court for the District of Columbia, said in her order that the government had demonstrated that “‘the effect of [the proposed merger] may be substantially to lessen competition’ in the market for the US publishing rights to anticipated top-selling books”. A full opinion detailing her reasoning was filed under seal.
The Department of Justice last year sued to block the publishing megamerger, alleging Penguin Random House and Simon & Schuster would control more than two-thirds of the market for acquiring publishing rights post-transaction. Authorities also argued the merged entity would squeeze advances, resulting in “substantial harm to authors of anticipated top-selling books and ultimately, consumers”, according to the lawsuit.