EXPLAINER: Bid to block book merger sets competition fight

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EXPLAINER: The biggest U.S. book publisher’s plan to buy the fourth-largest for $2.2 billion represents a key test for the Biden administration's antitrust policy. The Justice Department has sued to block the merger, contending it would thwart competition.

But the deal represents such a key test for the Biden administration’s antitrust policy that the Justice Department is calling an out-of-the-ordinary witness to The Stand: author extraordinaire Stephen King.

The government contends the merger would hurt authors and, ultimately, readers, if German media titan Bertelsmann is allowed to buy Simon & Schuster from U.S. media and entertainment company Paramount Global. It says the deal would thwart competition and give Penguin Random House gigantic influence over which books are published in the U.S., likely reducing how much authors are paid and giving consumers fewer books to choose from.

The Big Five — the other three are Hachette, HarperCollins and Macmillan — dominate U.S. publishing. They make up 90% of the market for anticipated top-selling books, the government’s court filing says. “The proposed merger would further increase consolidation in this concentrated industry, make the biggest player even bigger, and likely increase coordination in an industry with a history of coordination among the major publishers,” it says.

 

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