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Penguin Random House Goes To Court Over Simon & Schuster Merger

By Megan Whitlock


On 1 August, Penguin Random House began its US trial against the Department of Justice, which intends to block its $2.18 billion merger with Simon & Schuster announced in November 2020. If successful, the merger would see the "big five" publishing companies reduced to the "big four," following in the footsteps of Penguin’s acquisition of Random House in 2013, and would leave the company controlling a predicted 50% of the bestseller market.

The antitrust suit, which comes in the wake of the Biden administration wanting to crack down on major competition-threatening mergers such as these, is taking place in Washington, and the outcome will be decided in November.


At the time of writing, famed horror writer, Stephen King, has been the Department of Justice’s star witness. King took to the stand on 2 August to outline the threat that the merger poses to authors. He argued that as well as squeezing out competition due to their domination of shelf space, the "big five’s" conglomeration of smaller, independent publishing houses has led to a shrink in advances and a struggle for new, unestablished writers to break out and make a living.


This testimony echoes the dangers outlined in the Department of Justice’s filing, which claimed that the "big five" collectively account for 90% of the bestseller market (US statistics). The filing states that: “The proposed merger would further increase consolidation in this concentrated industry, make the biggest player even bigger, and likely increase coordination in an industry with a history of coordination among the major publishers” (LA Times). It also addresses the threat to readers, suggesting that the merger will continue the alarming precedent of a reduced quantity and variety of books published, with fewer publishing options for authors wanting to write to different niches, thus limiting the types of stories readers get to hear.


However, Penguin Random House and Simon & Schuster intend to argue the opposite, that by “making the combined entity a stronger bookselling competitor, the merger will incentivize other publishers to compete even harder for consumer attention” (pre-trial briefing). In an era where Amazon dominates the market, they argue that a stronger bookselling force will right the current imbalance with online retail, as well as allow for more efficient publishing which could ultimately reduce book prices.


The trial is expected to last three weeks (at the time of writing), and, regardless of the outcome, will set an important precedent for the future of the publishing market.

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