DoJ vs PRH Trial Begins

The lawsuit filed by the US Department of Justice to stop the proposed merger of Penguin Random House and Simon & Schuster has gone to trial this week.

Publishers Weekly has been covering the case: Monday featured opening arguments and testimony by Hachette CEO Michael Pietsch for the government, giving an overview of the book business and discussing how the merger would have a deleterious effect on competition.

Tuesday’s proceedings included author Stephen King as a voluntary witness for the government, opening with, “My name is Stephen King. I’m a freelance writer.” When asked why he’d offered to testify against his longtime publisher (Scribner is an imprint of S&S), King said,

I came because I think consolidation is bad for competition. That’s my understanding of the book business, and I’ve been around it for 50 years. When I started in this business, there were literally hundreds of imprints, and some of them were run by people with extremely idiosyncratic tastes, one might say. Those businesses were either subsumed one by one or they ran out of business. I think it becomes tougher and tougher for writers to find enough money to live on…. The more companies there are, the better competition there is… it’s a tough world out there now. That’s why I came.

The defense didn’t cross-examine King, with defense lawyer Dan Petrocelli saying, “I’d love to sit down and have a coffee with you someday, but I have no questions for you today.”

The other major witness on day two was Simon & Schuster CEO Jonathan Karp, whose testimony will continue on Wednesday. Karp spoke in defense of the merger, saying that authors  “benefit from competition among all publishers” and insisting there was nothing special about the competition between PRH and his company. The government brought up an email Karp wrote to an author in 2020 saying, “I’m pretty sure the Department of Justice wouldn’t allow Penguin Random House to buy us, but that’s assuming we still have a Department of Justice.”

Penguin Random House CEO Markus Dohle is expected to testify starting on Thursday.

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