An anti-trust lawsuit has been filed by the Justice Department to stop ViacomCBS‘ sale of Simon & Schuster to Penguin Random House. The Justice Department claims that the sale would give Penguin Random House too much power over the book business.
Announced in November 2020, the sale was for $2.1 billion between ViacomCBS and Bertelsmann, Penguin Random House’s parent company.
Attorney General Merrick Garland said:
Books have shaped American public life throughout our nation’s history, and authors are the lifeblood of book publishing in America. But just five publishers control the U.S. publishing industry. If the world’s largest book publisher is permitted to acquire one of its biggest rivals, it will have unprecedented control over this important industry. American authors and consumers will pay the price of this anticompetitive merger – lower advances for authors and ultimately fewer books and less variety for consumers.
The lawsuit is also an attempt to send a signal across the book industry that has had issues with collusion in the past.
The Justice Department claims that this would be a “monopsony,” a marketplace that has been squeezed due to consolidation in the buyers.
As we said during the initial announcement:
The deal has a ripple effect in the comic industry as well. Simon & Schuster is the exclusive distributor of BOOM! Studios, Oni Press, and Rebellion to bookstores. Penguin Random House is the exclusive distributor of DC Comics, Dark Horse, and IDW Publishing graphic novels to bookstores. The merger consolidates a distribution channel which has a potentially negative impact on negotiations between publishers and distributors but creates a more favorable position between the distributor and retailers.
Ironically, the comic industry has had concerns over distribution monopolies for years with Diamond Comic Distributors cornering the direct market to comic shops for years until 2020. DC Comics ended their exclusive deal with Diamond splitting distribution between UCS Comic Distributors and Lunar Distribution. DC ended its distribution through UCS creating a new “monopoly” through Lunar and creating a $500 minimum monthly order. Now, if this merger goes through, the bookstore distribution options will shrink narrowing choices though we’ll see if similar concerns are raised by the industry as have been raised in the past.
Since November, the distribution space for comics have shifted even further with Marvel going exclusive with Penguin Random House. Heavy Metal, AHOY Comics, Source Point Press, Vault Comics, AWA Studios, Red 5 Comics, and Behemoth have also signed with Simon & Schuster regarding distribution as well.
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Source: Graphic Policy
