Judge Blocks a Merger of Penguin Random House and Simon & Schuster

A federal judge blocked on Monday a bid by Penguin Random House, the biggest book publisher in the United States, to buy one of its main rivals, Simon & Schuster, in a significant victory for the Biden administration, which is trying to expand the boundaries of antitrust enforcement.

The judge, Florence Y. Pan, who heard the case in the United States District Court for the District of Columbia, said in an order that the Justice Department had demonstrated that the merger might “substantially” harm competition in the market for U.S. publishing rights to anticipated top-selling books.

The full order laying out Judge Pan’s reasoning is temporarily under seal because it contains confidential information, and will be released later after both parties file redactions.

Penguin Random House and its parent company, Bertelsmann, said in response on Monday that they planned to appeal.

In a statement, Penguin Random House called the decision “an unfortunate setback for readers and authors” and argued that “the Department of Justice’s focus on advances to the world’s best-paid authors instead of consumers or the intense competitiveness in the publishing sector runs contrary to its mission to ensure fair competition.”

The victory is a notable one for the Justice Department. Judges have ruled against several of its previous challenges to corporate deals, including UnitedHealth Group’s purchase of a technology company. In a statement on Monday, the Justice Department hailed the ruling as a win for authors and readers.