Simon & Schuster display at the London Book Fair at Kensington Olympia on the 12th March 2019 in London.
Sam Mellish | In Pictures | Getty Images
The Biden administration on Tuesday sued Penguin Random House and Simon & Schuster to block the two companies from completing a $2.175 billion merger that the administration said “would likely harm competition in the publishing industry.”
That loss of competition would undermine authors’ power to obtain advances and other services crucial for their books and careers, the Department of Justice’s Antitrust Division alleged in a civil lawsuit.
“If Defendants’ proposed merger is allowed to proceed, Penguin Random House would be, by far, the largest book publisher in the United States, towering over its rivals,” said the legal complaint, which was filed in federal court in Washington, D.C.
“The merger would give Penguin Random House outsized influence over who and what is published, and how much authors are paid for their work,” the Justice Department alleged.
Viacom in November 2020 announced the more than $2 billion deal to sell Simon & Schuster to to Penguin Random House. With that purchase, Bertelsmann’s media empire would grow to encompass roughly one-third of all the books sold in the U.S.
Penguin Random House and Simon & Schuster did not immediately respond to CNBC’s requests for comment on the DOJ’s lawsuit.
This is developing news. Please check back for updates.