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U.S. begins legal battle over merger of major publishing companies | Entertainment News

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WASHINGTON (AP)—Government and publishing giant Penguin Random House announced on Monday that it would block the nation’s largest book publisher from absorbing rival Simon & Schuster in a federal antitrust I exchanged the starting signal in court. The case will be an important test of the Biden administration’s antitrust policies.

The Justice Department has filed a lawsuit to block the $2.2 billion merger. This reduces the Big 5 publishers in the US to his four.

A prominent government witness and best-selling author, Stephen King, is set to testify in a multi-week trial on Tuesday in the United States District Court in Washington, DC.

At Monday’s opening ceremony, attorneys for each side filed their respective cases before U.S. District Court Florence Pang.

A Justice Department attorney said the merger was “probably wrong.” Penguin Random House countered that the new company would “enhance” competition.

The government will allow Bertelsmann, the German media giant to which Penguin Random House belongs, to acquire fourth-largest publisher Simon & Schuster from US media and entertainment company Paramount Global. And ultimately it claims to harm the reader. According to the company, the deal would stifle competition and give Penguin Random House greater influence over books published in the United States, resulting in less money being paid to authors and fewer books for consumers to choose from. may become.

Publishers counter that the merger would increase competition among publishers and allow them to provide more upfront payments and marketing assistance to authors.It would benefit readers, bookstores and authors, they say.

The two New York-based publishers have an impressive stable of blockbuster authors who have sold millions of copies and landed multi-million dollar deals. Among the Penguin Random House constellations are Barack and Michelle Obama memoir package deals estimated at $65 million, Bill Clinton, $15 million for memoirs, Toni Morrison, John Grisham, Dan I have Brown.

Simon & Schuster counts Hillary Clinton, who received $8 million for her memoir, Bob Woodward and Walter Isaacson. and King.

Bruce Springsteen shares the difference. His “Renegades: Born in the USA” with Barack Obama was published by his Penguin Random House. In his memoirs, by Simon & Schuster.

As it stands, Penguin Random House, No. 1 in total sales, and Simon & Schuster, No. 4, are competing fiercely for the rights to publish the books they expect to sell the most. claims. If allowed to merge, the combined company would control nearly 50% of the market for those books, reducing the upfront payments paid to authors and reducing production, creativity, and diversity, thereby increasing competition. will be lost, the company said.

The Big Five — the other three being Hachette, HarperCollins and Macmillan — dominate US publishing. According to the government, they account for his 90% of the expected top-selling book market.

The Biden administration is breaking new ground in business focus and competition, and the government’s opposition to publisher mergers is an important test.

President Joe Biden has made competition a pillar of his economic policy, denouncing the extraordinary market power of a range of industries and stressing the importance of strong competition for the economy, workers, consumers and small businesses. did. Mr. Biden, a Democrat, has called on federal regulators, particularly the Justice Department and the Federal Trade Commission, to scrutinize mergers of large companies more closely.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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