U.S. sues to stop Penguin Random House bid to buy Simon & Schuster

U.S. sues to stop Penguin Random House bid to buy Simon & Schuster

WASHINGTON, Nov 2 (Reuters) – The U.S. Justice Division filed a lawsuit on Tuesday aimed toward stopping Penguin Random House, the world’s greatest ebook writer, from shopping for competitor Simon & Schuster, saying the deal would give the corporate “outsized influence” over what People learn.

German media group Bertelsmann, which owns Penguin Random House, final yr agreed to pay $2.175 billion in money to buy Simon and Schuster from ViacomCBS, strengthening its presence in america and including novelist Stephen King, Pulitzer Prize winner Anthony Doerr and veteran journalist Bob Woodward to its secure of authors.

In its complaint filed in federal courtroom in Washington, the Justice Division mentioned the deal would give “outsized influence over who and what is published, and how much authors are paid for their work.”

The grievance stresses the significance of the businesses competing for top-selling books in addition to the cash earned by the individuals who write them.

“Authors are the lifeblood of book publishing in America. But just five publishers control the U.S. publishing industry,” Lawyer Common Merrick Garland mentioned in a press release. “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.”

The grievance mentioned that the publishers have argued that the deal is required to allow them to higher negotiate with ecommerce large Amazon.com (AMZN.O). However the Justice Division in its grievance quoted a high Penguin Random House government as saying that he “never, never bought into that argument” and {that a} post-merger aim can be to develop into an “exceptional partner” to Amazon.

The division didn’t specify when or in what context the chief’s feedback have been made.

If the merger have been to go ahead, the deal would give Penguin Random House practically half of the marketplace for publishing rights to blockbuster books whereas its nearest opponents can be lower than half its measurement, the grievance mentioned.

The grievance additionally mentioned that Simon & Schuster is the fourth greatest U.S. ebook writer and that, if mixed with Penguin Random House, its U.S. revenues can be twice that of their closest competitor’s.

Penguin Random House and Simon & Schuster mentioned in a joint assertion that they are going to “fight this lawsuit vigorously.” They mentioned the federal government didn’t allege that the deal would hurt competitors in ebook gross sales.

“The market for selling books is unconcentrated and the combined shares are well below the levels of concern,” they added.

Reporting by Diane Bartz and David Shepardson
Modifying by Will Dunham and Mark Potter

Our Requirements: The Thomson Reuters Trust Principles.

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