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Writer Wednesday: The Anti-Trust Lawsuit Ruling



Good morning and welcome to the middle of the week authors. Now while some of us are diving head first into the throes of NaNoWriMo, or grappling with the rapid fire rumors surrounding the changes to a certain social media platform, you might have missed the bombshell dropped this week surrounding the lengthy anti-trust lawsuit the DOJ filed against Penguin Random House's merger with Simon & Schuster.


Earlier this week, the ruling came down from Federal Judge Florence Y. Pan, who agreed with the Department of Justice's critique of the merger, that it would lessen competition for top selling books and ultimately hurt authors. The ruling is considered a win for the Biden administration which has taken a hard stance on corporate mergers.


Politics aside, many in the publishing community were also against this merger for its effects on the publishing marketplace and the effect it would have on acquisitions of new titles. The CEO's and higher ups within the two companies have, of course, voiced their opposition to the ruling and hinted that the supposed victory is merely a setback to their goals. The PHR CEO Markus Dohle said "I think the ruling is utterly wrong. We would have been able to sell more Simon & Schuster titles than they would have been able to sell on their own."


On the other side of the fence S& S CEO Johnathan Karp addressed the future of the house:


"Although we are disappointed with this decision, I want to reassure all of you that, despite this news, our company continues to thrive. We are more successful and valuable today than we have ever been. I am sure that you are eager to know what the future holds for Simon & Schuster. As you may have heard, Penguin Random House has announced its intention to request an expedited appeal of the ruling. We are reviewing the decision and discussing next steps with Paramount, Bertelsmann and Penguin Random House."

The case from over and could be locked up in appeals for years. Markus Dohle even mentioned how the merger would still only represent 20% of the publishing market while Amazon represented over 50% though failed to address the concerns of the author community and how this merger would have affected not only their royalties and advances, but the possible changes to acquisition and diversity of titles. Ultimately, those concerns and likely the argument of incompetence they used during the trial is what led to Judge Pen's ruling.


“Today’s decision protects vital competition for books and is a victory for authors, readers, and the free exchange of ideas.” -Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division.

It's still early days to see if this ruling pans out in favor of authors but it will be interesting to see how these two companies handle the appeals process after that trial defense. With the state of publishing being what it is, letting houses continue to eat each other was not a viable long term plan, though the echelons of traditional publishing might have benefitted from the government stepping in a long time ago before the houses trickled down to a handful. Time will tell.


Resources & Further Reading


https://www.justice.gov/opa/pr/justice-department-obtains-permanent-injunction-blocking-penguin-random-house-s-proposed

https://www.npr.org/2022/11/01/1133032238/judge-blocks-penguin-random-house-simon-schuster-merger

https://www.publishersweekly.com/pw/by-topic/industry-news/publisher-news/article/90798-court-blocks-penguin-random-house-s-s-merger.html


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