Penguin Random House’s owner, the German media conglomerate Bertelsmann SE & Co, announced on Tuesday that it would appeal a decision by an American court that barred the combination of Penguin and rival Simon & Schuster. In a statement, Thomas Rabe, chief executive officer of Bertelsmann, stated that “a merger would be good for competition” and added, “We will be filing a motion to appeal with the D.C. Court of Appeals.”
The largest book publisher in the world, Penguin Random House, and rival Simon & Schuster cannot combine for $2.2 billion, a U.S. judge has declared.
The Justice Department had demonstrated, according to Judge Florence Pan of the U.S. District Court for the District of Columbia, that the arrangement may significantly decrease competition “in the market for the U.S. publishing rights to anticipated top-selling books.”
“The proposed merger would have reduced competition, decreased author compensation, diminished the breadth, depth, and diversity of our stories and ideas, and ultimately impoverished our democracy,” U.S. Assistant Attorney General Jonathan Kanter had said in a statement.
Contrary to most merger disputes, which centre on consumer prices, this one was concerned with writers’ remuneration. The government argued that the agreement should be scrapped because it would lessen the competition for best-selling novels and result in smaller advances for authors who make at least $250,000.
Ina Garten, a recipe author, and the authors Zadie Smith and Danielle Steele are published by Penguin, whereas Stephen King, Jennifer Weiner, and Hillary Rodham Clinton, among others, are published by Simon & Schuster. The German media company Bertelsmann owns Penguin, while Paramount Global (PARA.O) controls Simon & Schuster.
In November 2021, the U.S. Justice Department filed a lawsuit to block the agreement.
