Chief Executive Officer Joe Biden appears to have taken his fight against monopolies very seriously. In addition to the big technology companies, in the spotlight due to an alleged abuse of market position, this Tuesday it was the turn of two big companies in the publishing sector. Preventing “a publishing giant, which would harm authors and consumers” is the goal of the Department of Justice in filing an antitrust lawsuit to block the acquisition by Bertelsmann-owned Penguin Random House of its close competitor, Simon & Schuster, a operation valued at 2,175 million dollars. As alleged in the document filed today in the District of Columbia Court, this takeover would allow Penguin Random House, already the world’s largest publisher, to exert enormous influence over books published in the United States and over rights. author, in addition to dwarfing the offer to readers.
Bertelsmann’s deal with ViacomCBS far exceeded the offer made to Simon & Schuster by media mogul Rupert Murdoch, the controversial owner of News Corporation. If the merger had gone ahead, the resulting conglomerate would have had the world’s best-selling authors on its payroll, such as best-sellers EL James and Stephen King, among many others.
“The complaint filed today to ensure fair competition in America’s publishing industry is the latest demonstration of the Department of Justice’s commitment to pursuing economic opportunity and fairness through antitrust enforcement,” said Attorney General Merrick. B. Garland, according to the statement issued by the Department.
“Books have shaped American public life throughout our nation’s history, and authors are the lifeblood of American book publishing. But only five publishing houses control the publishing industry of the country ”, emphasizes the attorney general. “If the world’s largest book publisher is allowed to acquire one of its biggest rivals, it will have unprecedented control over this important industry. American authors and consumers will pay the price for this anti-competitive merger: less advancement for authors and, ultimately, fewer books and less variety for consumers. “
Like the most important publishers, there are also five big technology companies (known as the Big Five) against which the antitrust policy of the White House is directed. With the appointment of prominent supporters of regulation, such as Lina Khan, head of the trade regulator (FTC, in its English acronym), Biden is committed to free competition in conditions of greater equity than those allowed to date: the model of Big technology biting into the market, by absorbing their small competitors, is the paradigm. An example against which the prosecutors of fifty states, as well as the FTC, have taken numerous actions in recent years with uneven results, in parallel to the regulatory offensive in the European Union (EU).
“By preventing Penguin Random House from extending its control of the US publishing market, the lawsuit will prevent further consolidation in an industry that has a history of collusion,” explained Richard A. Powers of the Department of Justice’s Antitrust Division.
The publishing industry is already highly concentrated, as the complaint highlights. Only five well-known publishers, like Silicon Valley tech companies like the Big Five, can offer a platform for distribution, advertising and business impact that is out of reach of other smaller competitors. The lawsuit alleges that the acquisition of Simon & Schuster would allow Bertelsmann-owned Penguin Random House to control about half of the market to acquire the publishing rights to the best-selling books early, leaving hundreds of individual authors with fewer options and a very small negotiation margin. According to its own documents, as described in the complaint, Penguin Random House views the US publishing market as an “oligopoly” and its acquisition of Simon & Schuster was intended to “consolidate” its position as the dominant publisher in the country.
In July, President Biden signed an executive order to boost competition, with 72 initiatives to be implemented by a dozen federal agencies, to stop the consolidation of large conglomerates, a growing phenomenon in the last two decades. These large consortia, in the opinion of the White House, stifle competition and innovation and are ultimately responsible for an impoverishment of the market. The lawsuit filed today against the great publishing merger is nevertheless one of the most significant movements of the new antitrust airs that are breathed in Washington.
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source https://pledgetimes.com/us-department-of-justice-blocks-merger-of-two-publishing-giants-with-antitrust-lawsuit/
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