US files antitrust lawsuit against Penguin-Simon & Schuster merger

The United States government filed a civil antitrust lawsuit on Tuesday to block the purchase proposal launched by the publishing giant Penguin Random House to acquire its rival Simon & Schuster.

The lawsuit was filed by the US Department of Justice in federal court in the District of Columbia.

In its judicial brief, the Executive alleges that the acquisition would allow Penguin Random House, the world’s largest publisher, to exert an excessive influence on the books published in the United States and the stipend paid to writers.

The United States Attorney General, Merrick Garlandsaid in a statement that the lawsuit seeks to guarantee fair competition in the sector and reflects the commitment of the department that it directs against monopolies.

“Books have shaped American public life throughout our nation’s history, and authors are the lifeblood of American book publishing, but only five publishers control America’s publishing industry,” Garland said.

He warned that if Penguin Random House is allowed to acquire one of its biggest competitors, the world’s largest publisher will have unprecedented control over the industry and American writers and, in addition, readers will pay the price of a merger that goes against from the competition.

In the brief of the lawsuit, the Department of Justice details that currently Penguin Random House and Simon & Schuster, the fourth largest publisher in the United States, compete to buy manuscripts of authors offering as advances large sums of money and other benefits, as well as favorable contracts for writers.

However, if the merger were to take place, that competition would be eliminated, with which the authors would receive a lower stipend, which would lead to fewer books on the market and less variety for readers, indicates the Government.

The Justice Department adds that the purchase of Simon & Schuster for US $ 2.175 million would put Penguin Random House in a situation where it would control almost half of the market to acquire the publishing rights to the books that are believed to sell more, leaving hundreds of writers with fewer options for their works to see the light.

The lawsuit, which cites documents from Penguin Random House, maintains that this publisher sees the US market as an “oligopoly”, where the merger with Simon & Schuster would “cement” its dominant position in the sector.