Feds Sue to Stop Penguin From Becoming Two-Thirds of the Publishing Industry

The Justice Department filed an antitrust suit Tuesday to block an American publishing giant’s proposed acquisition of one of its main rivals. Penguin Random House, owned by the German conglomerate Bertelsmann and itself the product of a merger, announced last year that it had reached an agreement to acquire Simon & Schuster for $2.75 billion. The Justice Department alleges in its suit that the takeover would create an anticompetitive “publishing behemoth.” Five large companies control the majority of American publishing, and the takeover of Simon & Schuster by a rival would make four. Penguin is already the largest among the five by a vast margin. Attorney General Merrick Garland said in a statement, “If the world’s largest book publisher is permitted to acquire one of its biggest rivals, it will have unprecedented control over this important industry… Post-merger, the merged firm and its next largest competitor would account for more than two-thirds of that market.” Penguin’s lawyer said in a statement, “The government should only be challenging those mergers where they can prove that, as a result of the combination, consumers are going to be harmed — typically in the form of higher prices. And here there is no such evidence.”