“Upon review of the extensive record and careful consideration of the parties’ arguments, the court finds that the United States has shown that ‘the effect of [the proposed merger] may be substantially to lessen competition’ in the market for the U.S. publishing rights to anticipated top-selling books,” District Court Judge Florence Pan of the U.S. District Court for the District of Columbia wrote in the order.
In November 2021, the DoJ filed a lawsuit to stop the merger under Section 7 of the Clayton Act. In its complaint, the DoJ argued the merger “would give Penguin Random House outsized influence over who and what is published, and how much authors are paid for their work.”
Following Judge Pan’s Oct. 31 ruling, Assistant Attorney General Jonathan Kanter of the Antitrust Division praised the decision, saying it “protects vital competition for books and is a victory for authors, readers, and the free exchange of ideas. The proposed merger would have reduced competition, decreased author compensation, diminished the breadth, depth, and diversity of our stories and ideas, and ultimately impoverished our democracy.”
Media company Bertelsmann, the parent company of Penguin Random House, called Judge Pan’s ruling “wrong” and stated it “plans to file an expedited appeal against the ruling.”
“We do not share the court’s assessment any more than we previously shared the Department of Justice’s position,” said Bertelsmann CEO Thomas Rabe. “Both are based on incorrect basic assumptions, including an inaccurate definition of the market.”
The district court’s decision, which followed a 13-day trial in August of this year, is temporarily under seal to allow the parties to review matters of confidentiality. 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.