CNN — A federal judge stopped Penguin Random House from buying Simon & Schuster, arguing that combining the two book giants would unlawfully lessen competition.
The ruling, most of which has been kept confidential, comes nearly a year after the Justice Department filed a lawsuit to block the deal. U.S. District Court Judge Florence Pan agreed with the Biden administration that the deal should not be allowed to go ahead.
The Justice Department complaint was one of the Biden administration’s first major antitrust actions. In its lawsuit, the administration said the deal would give the merged company too much control over the amount of authors’ compensation.
The challenge highlighted the potential harm to authors since the merger would reduce the number of potential bidders for highly anticipated books.
Penguin Random House and Simon & Schuster are two members of the “Big Five”, the industry term for the five largest publishers in the United States.
Simon & Schuster’s parent company Paramount and Penguin Random House, a subsidiary of German media giant Bertelsmann, announced the $2.175 billion deal in November 2020.
Since then, the two companies have been trying to obtain regulatory approval in the United States and other countries.
Other publishing houses argued that the merger would be anti-competitive.
— CNN’s Brian Stelter contributed to this report.
The-CNN-Wire™ & © 2022 Cable News Network, Inc., a Warner Bros. Company. Discovery. All rights reserved.
Copyright 2022 by Cable News Network, Inc., a Time Warner Company. All rights reserved.