Justice Department sues to block merger of publishing bigwigs

A private company acquiring another is none of the government’s business, you’d imagine. But the Department of Justice has sued to block a merger of two major US book publishing houses, citing “unfair competition.”

Penguin Random House, the country’s biggest publisher, proposed to buy rival Simon & Schuster, the fourth-largest, for $2.2 billion. If the deal goes through, it will reduce the “Big Five” US publishers to four.

Antitrust trial opens Monday
The antitrust trial the publishers are fighting will open Monday in a Washington federal court. The lawsuit is being touted as a crucial step for President Joe Biden’s administration, which is trying to fight corporate concentration.

Biden issued an executive order last year urging federal agencies to target anti-competitive business practices in healthcare, tech, agriculture and several other parts of the economy.

Thwarting competition?
The government contends if the two publishing houses are allowed to merge, it would thwart competition—the combined company would control nearly 50% of the market for the anticipated best-selling books.

This massive influence over books that are published in the US will likely reduce payments to authors and leave consumers with fewer books to choose from, the Justice Department says in its suit.

But the two publishers argue that the merger will encourage competition and growth in the publishing industry, benefitting readers, booksellers and authors.

Another antitrust trial
The government vs publishers isn’t the only antitrust trial that opens Monday.

The Justice Department has also sued to block health insurer UnitedHealth Group from buying out health-tech firm Change Healthcare on grounds that the $13 billion deal will hurt competition and leave too much health care claim information in the hands of one company.