U.S. judge says Penguin Random House giant book merger cannot go forward

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WASHINGTON (Reuters) – A planned $2.2 billion merger of Penguin Random House, the world’s largest book publisher, and rival Simon & Schuster cannot go forward, a judge ruled on Monday.

Unlike most merger fights, which are focused on what consumers pay, this one focused on authors’ earnings. The government argued that the deal would lead to lower advances for authors who earn $250,000 or more.

Judge Florence Pan of the U.S. District Court for the District of Columbia said in a brief order that she had found that the Justice Department had shown that the deal may substantially lessen competition “in the market for the U.S. publishing rights to anticipated top-selling books.”

Penguin writers include cookbook author Ina Garten and novelists Zadie Smith and Danielle Steele while Simon & Schuster publishes Stephen King, Jennifer Weiner and Hillary Rodham Clinton, among others.

Penguin is owned by German media group Bertelsmann SE & Co while Paramount Global owns Simon & Schuster.

Neither the companies nor the Justice Department immediately responded to a request for comment.