Stephen King goes to bat for U.S. gov’t in case against book publishing mega-merger
By Diane Bartz
WASHINGTON (Reuters) – The U.S. Justice Division will ask a federal choose on Monday to dam a $2.2 billion merger of two of the “Massive 5” e-book publishers, Penguin Random Home and Simon & Schuster, in a trial that’s anticipated to characteristic testimony from horror author Stephen King.
Additionally on Monday, in the identical federal courthouse in Washington, the Justice Division will argue earlier than a unique choose that UnitedHealth Group’s $8 billion deal to purchase Change Healthcare must be stopped.
Within the writer merger trial, the federal government has centered not on what shoppers pay for books however on advances paid to essentially the most profitable authors, particularly these given $250,000 or extra.
“The proof will present that the proposed merger would seemingly end in authors of anticipated top-selling books receiving smaller advances, that means authors who labor for years over their manuscripts shall be paid much less for his or her efforts,” the federal government stated in a pretrial temporary.
The federal government additionally intends to point out there was concern among the many merging events that the deal shouldn’t be authorized. It beforehand disclosed an electronic mail despatched by Simon & Schuster CEO Jonathan Karp who wrote: “I am fairly certain the Division of Justice would not enable Penguin Random Home to purchase us, however that is assuming we nonetheless have a Division of Justice.”
King, creator of “The Shining,” “Carrie” and different blockbusters, will testify for the federal government, together with publishing executives and authors’ brokers.
Penguin Random Home, the most important e-book writer in america, stated it deliberate to purchase rival Simon & Schuster in November 2020. Penguin Random Home is owned by German media conglomerate Bertelsmann. Simon & Schuster is owned by ViacomCBS, now Paramount International. The Justice Division filed its lawsuit in November 2021.
The protection, led by lawyer Daniel Petrocelli who defeated the Trump administration’s 2018 bid to cease AT&T Inc from shopping for Time Warner, will argue the marketplace for books, and for publishers to win top-selling authors, is aggressive and that the merger will make it much more so.
The publishers will seemingly argue that the proof exhibits that in bidding for potential bestsellers Penguin Random Home and Simon & Schuster “are not often the highest two bidders.”
The highest 5 publishers are Penguin Random Home, HarperCollins, Macmillan, Simon & Schuster and Hachette, with Walt Disney Co and Amazon.com Inc additionally out there. HarperCollins is owned by Information Corp.
Decide Florence Pan of the U.S. District Courtroom for the District of Columbia will determine if the deal might go ahead. The trial is predicted to final two to a few weeks.
(Reporting by Diane Bartz in Washington; Enhancing by David Shepardson and Matthew Lewis)
