WASHINGTON: A planned $2.2 billion merger of Penguin Random House, the world’s largest book publisher, and rival Simon & Schuster cannot go forward, a US judge has ruled.

Judge Florence Pan of the US District Court for the District of Columbia, said in a brief order on Monday that she found the Justice Department had shown the deal may substantially lessen competition “in the market for the US publishing rights to anticipated top-selling books.”

Unlike most merger fights, which are focused on what consumers pay, this one focused on authors’ earnings. The government argued the deal should be stopped because it would lead to less competition for blockbuster books and lower advances for authors who earn $250,000 or more.

Penguin Random House said the decision was “unfortunate,” and said it would “immediately request an expedited appeal.” “A merger would be good for competition,” said Thomas Rabe, chief executive of Penguin owner Bertelsmann, who said the court’s decision was based on incorrect basic assumptions.

Penguin writers include cookbook author Ina Garten and novelists Zadie Smith and Danielle Steele, while Simon & Schuster publishes Stephen King, Jennifer Weiner and Hillary Rodham Clinton, among others.

Published in Dawn, November 2nd, 2022