Penguin Random House Blocked From Acquiring Rival Publisher Simon & Schuster
Interesting to me that its blocked not on the basis of consumer welfare but author monopsony. Interesting debate about what's the relevant market, book sales vs best seller book sales.
“The Court finds that the United States has shown that the effect of the proposed merger may be substantially to lessen competition in the market for the U.S. publishing rights to anticipated top-selling books,” Judge Pan wrote in a two-page order.
The judge, an appointee of President Biden, didn’t make her full ruling immediately available for public view because she said it contained confidential business information. A redacted public version of the decision is expected in the coming days.
The Justice Department, which sued to challenge the merger a year ago, focused its case not on book prices, but on author wages, saying writers of anticipated bestsellers, which the government defined as books acquired for advances of at least $250,000, would likely receive smaller upfront payments, or advances, if the deal was completed.
The Justice Department warned that the combined company would control approximately 49% of the market for anticipated top-selling books.
Penguin Random House and Simon & Schuster estimated the size of that market at roughly 1,200 books annually, or 2% of all books published by commercial publishers.
On a sales basis, a combination of Penguin Random House and Simon & Schuster would have accounted for nearly 30% of all consumer-book sales in the U.S., according to book tracker NPD BookScan.