One of the big news stories this month in publishing has been the U.S. Department of Justice’s antitrust case against the proposed merger between Penguin Random House (PRH) and Simon & Schuster (S&S).
All of the arguments have been made, as Friday was the day for closing arguments. Judge Florence Pan is expected to make a ruling in the coming weeks.
John Read from the Department of Justice was first up. “This merger will end that competition which benefits authors, and authors will earn less money for what they write.” He added, “We brought this case because the best protection for authors is robust competition. This is not about the passion of publishers for books and authors, this is about the largest publisher, Penguin Random House, cementing its position at the top of the market.”
Read later shot down PRH’s arguments that there were viable competitors who might suddenly emerge, such as Amazon Publishing or newer publishers such as Spiegel & Grau. He said, “A publisher that re-founded itself a few years ago and published a handful of books, that Penguin Random House closed the imprint and retained its backlist – it’s improbable to find publishers they didn’t want to keep are now competitive with them.”
He also noted that there has not been a single publisher to enter the market in the past three decades and become as strong as the Big Five publishers.
Penguin Random House’s attorney, Bill Petrocelli, then took the stand. He brought up when the DOJ called Stephen King to the stand. “I enjoyed listening to Stephen King,” he said. “But no one is disputing his earnings. There are writers in this market who are billionaires. I mean Stephen King could buy Simon & Schuster.”
The attorney for Simon & Schuster, Stephen Fishbein, stated why his company agreed to sell to Penguin Random House. “[PRH] offered the best price. We also believe that the deal will benefit S&S authors.” He also talked about how market share is not static. “You will have competitors emerge for any gap in the market that emerges.” He brought up Scholastic and Disney as major publishers that are not part of the so-called “Big Five” – “If we included them, it would change the landscape.”
Fishbein went on to say, “My clients want this merger because it is a cultural fit.” “Penguin Random House is fully committed to books.” Other publishers felt as if they would be at a disadvantage because the post-merger PRH would do a better job at buying, marketing, and selling books. “Even their criticism shows this is better” for authors.
For more coverage of this case, please visit Publishers Weekly.