![]() That argument isn’t relevant to the case and her decision, Pan wrote, which turns only on the issue of how the merger would affect competition. District Court Judge Florence Pan also waved off as not relevant the publishers’ assertion that Penguin Random House would be the best “home” for Simon & Schuster and that other buyers - notably private equity firms - could destroy it. But the DOJ's lawsuit rejects that premise, accusing Penguin Random House of planning "to embrace Amazon even more closely" after it purchases Simon & Schuster.In her ruling filed Monday, U.S. The joint statement from Penguin Random House and Simon & Schuster argued that their merger will not prevent competition in the industry among a range of publishers, including "newer entrants like Amazon."Īmazon's rise to become the world's largest retailer has bred concerns about its impact on the publishing industry. That order was primarily aimed at the tech sector. President Joe Biden in July signed a weighty executive order aimed at cracking down on anti-competitive business practices, including by urging more federal scrutiny toward "bad mergers" and "killer acquisitions," where large firms buy up smaller brands to take them out of the market. "Simon & Schuster has changed ownership seven times over the course of our 97-year history, and always our authors and our books have remained our principal concern, interest, and passion," Karp's memo said. "For all of us, this news is unsettling: nobody likes to work in an atmosphere of uncertainty," said the memo from Karp, who lauded staff for their "ability to adapt under extreme conditions" during the coronavirus pandemic. Simon & Schuster CEO Jonathan Karp, in a memo to staff shared with CNBC by a spokesman for the publisher, said he was "committed" to fighting the lawsuit. "Post-merger, the two largest publishers would collectively control more than two-thirds of this market, leaving hundreds of authors with fewer alternatives and less leverage." "If consummated, this merger would likely result in substantial harm to authors of anticipated top-selling books and ultimately, consumers," the DOJ's lawsuit said. The two publishers vowed to "vigorously" fight the lawsuit, contending in a joint statement that the publishing industry will still be "a vibrant and highly competitive environment" after the merger. ![]() With that purchase, Bertelsmann's media empire would grow to encompass roughly one-third of all the books sold in the U.S. Viacom announced announced in November 2020 the more than $2 billion deal to sell Simon & Schuster to Penguin Random House. The DOJ lawsuit also named as defendants Bertelsmann and ViacomCBS, the respective parent companies of Penguin Random House and Simon & Schuster. "The merger would give Penguin Random House outsized influence over who and what is published, and how much authors are paid for their work," the Justice Department alleged. "If Defendants' proposed merger is allowed to proceed, Penguin Random House would be, by far, the largest book publisher in the United States, towering over its rivals," said the legal complaint, which was filed in federal court in Washington, D.C.
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