Penguin Random House’s proposed $2.18 billion acquisition of Simon & Schuster will result in lower advances to authors because there will be fewer auction rounds, the chief executive of Penguin’s rival Hachette Book Group told a judge at the start of an antitrust trial aimed at blocking the combination.
Michael Pietsch said the size of an advance is usually the “deciding factor” for authors and that his company rarely loses auctions to publishing houses outside of the biggest five players. He admitted Hachette has an interest in acquiring Simon & Schuster if the Penguin deal is blocked.
The US sued to block the acquisition of the fourth biggest book publisher, Simon & Schuster, by Penguin, the No. 1 publisher, claiming it will hurt the livelihood of authors and result in fewer choices for consumers. The suit comes as the Biden administration has taken a more aggressive approach to vetting mergers and blunting the impact of increased consolidation. The trial is scheduled to last about three weeks.
“This lawsuit is designed to protect those authors and those books,” John Read, an attorney for the Justice Department, told US District Judge Florence Pan, who was nominated this year by President Joe Biden to sit on the appeals court, in Washington. Pan is hearing the case without a jury.
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