Judge blocks Penguin Random House's purchase of Simon & Schuster
By CNN Business staffUpdated: Tue, 01 Nov 2022 01:23:30 GMTSource: CNN BusinessA federal judge blocked Penguin Random House from buying Simon & Schuster, arguing that the combination of the two book bBy CNN Business staff
Updated: Tue, 01 Nov 2022 01:23:30 GMT
Source: CNN Business
A federal judge blocked Penguin Random House from buying Simon & Schuster, arguing that the combination of the two book business giants would illegally reduce competition.
The ruling, most of which remained confidential, comes nearly a year after the Justice Department sued to block the deal. US District Court Judge Florence Pan agreed with the Biden administration that the deal should not be allowed to go forward.
The Justice Department's complaint was among the first major antitrust actions by the Biden administration. In its lawsuit, the administration said the deal would give the combined company too much control over how much authors are paid.
The challenge emphasized the potential harm for authors since the merger would reduce the number of potential bidders for highly-anticipated books.
Penguin Random House and Simon & Schuster are two members of the "Big Five," the industry's term for the five biggest publishers in the United States.
Simon & Schuster's parent, Paramount, and Penguin Random House, a subsidiary of German media giant Bertelsmann, announced the $2.175 billion deal in November 2020.
Since then, the two companies have been trying to win regulatory approval in the United States and other countries.
Other publishing houses have argued that the merger would be anticompetitive.