Biden’s tougher stance on big mergers wins as judge blocks Penguin Random House’s bid to buy Simon & Schuster
FortuneNov 01, 2022
On Monday, Penguin Random House’s proposed purchase of rival Simon & Schuster was blocked. US District Court Judge Florence Y. Pan announced that she agreed with the US Dept. of Justice (DOJ) that combining two of the world’s largest publishers would “lessen competition” for “top-selling books.”
Pan’s ruling will remain sealed until Friday to protect confidential information and get feedback from both sides of the case on what details should be redacted.
The DOJ has had some setbacks in its attempt to ensure a fair and competitive marketplace across industries, but this is a solid victory. The federal government can only hope it can convince other judges to break with precedent and make decisions that’ll wisely enforce antitrust laws and limit future consolidation attempts by companies. This is a win against rampant mergers and acquisitions that hurt consumers in the end.
The DOJ shouldn’t get too carried away celebrating this win. There are still several other cases working their way through the courts, and the government will need to convince business-friendly federal judges. Look for more consolidation attempts as companies continue to view the DOJ as a paper tiger while assessing the benefits of corporate mergers.