PRH Fires Back at the DoJ’s Effort to Stop Its S&S Purchase (

Penguin Random House’s attorneys responded today to the Department of Justice’s efforts to block its acquisition of Simon & Schuster, attacking the government’s main complaint, that the purchase would “likely result in substantial harm to authors of anticipated top-selling books and ultimately, consumers.”

In filing its suit to block the deal November 2, the DOJ said that a combined PRH-S&S, along with HarperCollins, “would collectively control more than two-thirds of this market, leaving hundreds of authors with fewer alternatives and less leverage.” PRH attacks this charge on several levels and begins by calling the theory of a “top-selling” category “fiction,” noting that the government doesn’t even identify what size of an advance it is referring to. “The publishing industry does not divide the market for book rights into distinct categories based on the author’s compensation for the book,” PRH’s lawyers said.” “The royalty advance for a proposed book is driven mainly by the reader demand a particular editor anticipates for that particular book.”

The PRH reply argued that the failure by the DOJ to identify the range of the size of the market it is talking about is “critical,” arguing, “The only potentially legitimate market in this context is the market for rights in all proposed books. And as to that market, DOJ barely makes any allegations at all. Most important, DOJ alleges no cognizable competitive harm—it does not even suggest that the merger will cause a market-wide decline in royalty advances or in overall author compensation.”
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