The Department of Justice Antitrust Division sued to stop a $2.18 billion merger between publisher Penguin Random House and Simon & Schuster, saying it “would likely harm competition in the publishing industry.”
The lawsuit, filed on Nov. 2 in the District of Columbia, United States District Court, includes the request that defendants Bertelsmann SE & Co. KGaA; Penguin Random House, LLC; ViacomCBS, Inc.; and Simon & Schuster, Inc., “be permanently enjoined and restrained from carrying out the proposed acquisition,” the complaint said. It also asks that any transaction be blocked that would combine the two companies.
Penguin Random House’s parent company Bertelsmann, and Simon & Schuster’s parent company ViacomCBS, arranged the deal.
“On November 25, 2020, Bertelsmann and ViacomCBS announced that Penguin Random House would acquire Simon & Schuster from ViacomCBS in an all-cash deal valued at approximately $2.175 billion,” the complaint said.
The proposed acquisition violates the section of the Clayton Antitrust Act of 1914 that refers to mergers and acquisitions, the complaint said. Among things, the act prohibits anticompetitive mergers, Investopedia said.
“The United States of America brings this civil action to stop Penguin Random House, LLC—the world’s largest book publisher—from buying its publishing rival, Simon & Schuster, Inc.,” the complaint said. “If Defendants’ proposed merger is allowed to proceed, Penguin Random House would be, by far, the largest book publisher in the United States, towering over its rivals. The merger would give Penguin Random House outsized influence over who and what is published, and how much authors are paid for their work.”
In general, Bertelsmann has a policy against violating antitrust laws.
“Antitrust laws are designed to protect free and fair competition and
