Judge Pan has not yet ruled on Penguin’s promise that its publishing divisions will compete against each other post-merger in bidding for new books. Neither independently verified the savings, rendering the claims insufficient. Judge Pan found that the defendants’ efficiencies witness and its economic expert simply accepted at face value claimed cost savings generated in-house.
For efficiency claims to win the day, antitrust precedent and the joint DOJ-FTC Horizontal Merger Guidelines require that they be verified, merger-specific and sufficient to reverse any anticompetitive harms from the merger. Indeed, she already has properly rejected Penguin’s efficiency defense. Judge Pan seems appropriately skeptical of both arguments. In any event, our internal, unverified analysis demonstrates that the efficiencies from the deal dwarf any anticompetitive concerns, and of course, those savings will be shared with consumers.We will continue to compete vigorously, even if the merger creates market power, or in this case, our divisions will still compete against one another-even though we will own them both and.Parties defending mergers in concentrated markets routinely say “trust us” that: This case highlights two shopworn defenses in horizontal mergers that warrant judicial skepticism. After further briefing, Judge Florence Y. The preliminary injunction hearing in the Department of Justice complaint to block the acquisition of Simon & Schuster publishers by Penguin Random House has just ended.
#SIMON SCHUSTER PROFESSIONAL#
Blessing this kind of remedy would make publishing more akin to professional wrestling, whereas real competition is needed to benefit authors and readers. They also have promised that their publishing divisions would compete against each other. Biden, a Democrat, has called on federal regulators, notably the Justice Department and the Federal Trade Commission, to give greater scrutiny to big business combinations.In trying to get their merger approved, Penguin and Simon & Schuster claimed massive, but unverified cost savings.
President Joe Biden has made competition a pillar of his economic policy, denouncing what he calls the outsized market power of an array of industries and stressing the importance of robust competition to the economy, workers, consumers and small businesses. The Biden administration is staking out new ground on business concentration and competition, and the government's case against the publishers' merger can be viewed as an important step. The case "potentially creates a precedent that could be used in the labor area," said Rebecca Allensworth, an antitrust expert who is a law professor at Vanderbilt University. The notion is that fewer buyers (publishers) competing over the same talent pool reduces sellers' (authors) bargaining power. The Justice Department case reaches beyond the traditional antitrust concern of concentration raising prices for consumers, pointing to the impact on consumers' choices and viewing authors as workers as well as sellers of products in the global marketplace of ideas. The merger at issue in this case will encourage even more competition and growth in the U.S. Publishers compete vigorously to reach those readers, and the only way they can compete effectively is to find, acquire and publish the books readers most want to read. "More readers are reading books than ever before, and the number grows every year. publishing industry is robust and highly competitive," they say in their filing.
The government has failed to show harm to consumers as readers because the merger wouldn't push up prices, the companies contend. It would benefit readers, booksellers and authors, the publishers say, by creating a more efficient company that would bring lower prices for books. Penguin Random House and Simon & Schuster argue the merger would actually strengthen competition among publishers to find and sell the hottest books, by enabling the combined company to offer greater compensation to authors. "The proposed merger would further increase consolidation in this concentrated industry, make the biggest player even bigger, and likely increase coordination in an industry with a history of coordination among the major publishers," it says. They make up 90% of the market for anticipated top-selling books, the government's court filing says. The Big Five - the other three are Hachette, HarperCollins and Macmillan - dominate U.S. Opposing attorneys for the two sides will present their cases before U.S. Discussing the legacy of writer Hunter S.
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