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| Photo Credit: AP. |
The U.S. government is filing antitrust proceedings against two publishing giants in a bid to prevent the merger of German titan Bertelsmann and Simon & Schuster.
The legal
battle between the government and titan Penguin Random House are set to begin in
a federal antitrust trial Monday as the U.S. moves to block the biggest U.S.
book publisher from absorbing rival Simon & Schuster, The Associated Press
reports.
Justice Department opposes Penguin Random House - Simon & Schuster merger
The Department
of Justice (DOJ) is seeking to block the $2.2 billion merger deal which would
reduce the Big Five U.S publishes to four.
The government
is presenting a star witness Stephen King, the renowned and genre-transcending
author whose works are published by Simon & Schuster, according to The
Associated Press. King’s testimony would be heard at the U.S District Court in
Washington, D.C. in what appears to be a weekslong trial.
publishing giants merger would hurt authors, thwart competition- U.S. government
The government
argues that the deal would hurt authors and ultimately, readers if German Media
titan Bertelsmann, of which Penguin Random House is a division, is allowed to
buy Simon & Schuster from U.S. media and entertainment company Paramount
Global, The Associated Press reported.
The government
also contends that the deal would thwart competition and give Penguin Random
House gigantic influence over which books are published in the U.S., which
could reduce how much authors are paid and giving consumers fewer books to
choose from.
Publishers
in a counter argument are saying that the merger would strengthen competition
among publishers to find and sell the hottest books, by enabling the combined
company to offer bigger advance payments and marketing support to authors, according
to The Associated Press. They said it would benefit readers, booksellers and
authors.
Opposing
attorneys will present their cases before U.S. District Judge Florence Pan.
The Justice
Department contends that No. 1 Penguin Random House and No. 4 Simon &
Schuster, by total sales, compete fiercely to acquire the rights to publish the
anticipated hottest-selling books, according to The Associated Press.
It noted
that if they are allowed to merge, the combined company would control nearly
50% of the market for those books and hurting competition by reducing advances
paid to authors and diminishing output, creativity and diversity.
The other
three which forms part of the Big Five are Hachette, HarperCollins and
Macmillan. They dominate the U.S. publishing business and make up 90% of the market
for anticipated top-selling books, The Associated quoted the government as
saying.