The United States Department of Justice filed a lawsuit on November 2, 2021 to stop the proposed merger of Penguin Random House and Simon & Schuster. The government cited concerns that the deal would be detrimental to writers because it would “likely to substantially lessen competition,” leading to a “highly concentrated” market: “The merger would give Penguin Random House outsized influence over who and what is published, and how much authors are paid for their work.”
Penguin Random House plans to fight the challenge, and has hired lawyer Daniel Petrocelli to defend them. Petrocelli defeated the government’s attempt to stop the 2018 merger of AT&T and Time Warner. A combined statement from PRH and S&S called the merger a “pro-consumer, pro-author, and pro-book seller transaction, which will allow increased investment in the publishing programs of both S&S and PRH,” and said that “blocking the transaction would harm the very authors DOJ purports to protect.”
PRH is the world’s largest book publisher, and its proposed merger would make its position even more dominant, though executives say S&S would remain editorially independent.
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Penguin Random House said it planned to vigorously fight the challenge and hired Daniel Petrocelli as its trial lawyer. Mr. Petrocelli successfully defended AT&T and Time Warner against the Justice Department when it tried to block their $100 billion merger.