DOJ To Call On Stephen King In Publisher Monopoly Suit

The U.S. Department of Justice informed a D.C. federal judge that it plans to call world-renowned author Stephen King to testify at trial next month in the government’s challenge to Penguin Random House LLC’s $2.18 billion bid to acquire Simon & Schuster.

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King, the author behind dark novels like “The Shining” and “Mr. Mercedes,” will testify about his experiences in selling books and how the publishers’ merger could impact the market for “anticipated top-selling books,” according to the schedule of witnesses for the federal government filed late Friday.

“Mr. King, an author, is expected to testify about his experiences in selling anticipated top-selling books and his perceptions of the manner in which the market for book rights operates, including … the expectations and needs of anticipated top-selling authors; the characteristics of firms that successfully purchase anticipated top-selling books; and the likely effects of the proposed transaction on the market for anticipated top-selling books,” the filing states.

The parties anticipate having a short, in-person bench trial beginning Aug. 1. The DOJ challenged the publishers’ deal at the end of last year, honing in heavily on how authors will be affected by the creation of “by far, the largest book publisher in the U.S., towering over its rivals.”

According to the complaint, the DOJ is particularly concerned about possible harm to “authors of anticipated top-selling books,” for whom Penguin Random House and Simon & Schuster currently “compete vigorously” for publishing rights through advances as well as editorial and marketing services.

Without that competition, the DOJ alleges that the new company would have unfair leverage over bestselling authors, allowing for deflation of advances for those authors. This cycle would in turn reduce incentives for authors to publish, making it harder to make a living and ultimately result in fewer books produced.

Under the deal announced in November 2020, German conglomerate Bertelsmann SE & Co. KGaA — the parent company of Penguin, which is itself the largest book publisher in the world — would assume control of Simon & Schuster.

The companies have argued that the department’s focus on monetary advances for authors demanding a high ticket overstates the volume of those authors’ books the publishers buy and “ignores robust competition from numerous publishers that compete for advances.”

The case – expected to be a key landmark for monopoly merger enforcement – seeks to prevent one buyer from dominating sellers in a market.

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