US judge blocks $2.2B Penguin Random House merger(theguardian.com)
theguardian.com
US judge blocks $2.2B Penguin Random House merger
https://www.theguardian.com/books/2022/oct/31/penguin-random-house-simon-schuster-merger-blocked
44 comments
> can't see any consumer benefit to a merge
Economies of scale in production and distribution exist.
> lots of potential for harm
Yes. The scaling economies are dwarfed by the extractive ones.
Economies of scale in production and distribution exist.
> lots of potential for harm
Yes. The scaling economies are dwarfed by the extractive ones.
> Economies of scale in production and distribution exist.
How is that a consumer benefit in the absence of competition?
How is that a consumer benefit in the absence of competition?
Exactly. There's no incentive to pass efficiency savings on to consumers vs just making more profit.
Also, the types of efficiency savings that may be made by monopolies can be fragile. For example, implementing a standard component from one vendor across an entire industry renders that industry more vulnerable to bugs or faults on the component or the vendor going bankrupt.
Also, the types of efficiency savings that may be made by monopolies can be fragile. For example, implementing a standard component from one vendor across an entire industry renders that industry more vulnerable to bugs or faults on the component or the vendor going bankrupt.
I think I'm agreeing, depending on what you mean by "extractive."
Scaling economies mainly benefit the shareholders. Possibly they lead to lower prices, or higher royalties to authors, but that's only speculative.
Scaling economies mainly benefit the shareholders. Possibly they lead to lower prices, or higher royalties to authors, but that's only speculative.
If you allow this company to happen then they’ll be able to set the market price for buying and selling books to libraries, bookstores, bookstores, etc….
If this were to happen they would also be able to limit how many books are being printed, and therefore they may censor authors and books that have unpopular or controversial opinions. They’ll also try to control the amount of books that get sold to the public because it could increase the prices of buying them in bookstores.
If this were to happen they would also be able to limit how many books are being printed, and therefore they may censor authors and books that have unpopular or controversial opinions. They’ll also try to control the amount of books that get sold to the public because it could increase the prices of buying them in bookstores.
As a former S&S employee, I would have to say, that makes no sense at all.
Sorry your comment carries no information. You need to say in at least one sentence why it makes no sense.
As a random person on the internet, it makes sense to me.
Would you please explain what exactly doesn't make sense?
Would you please explain what exactly doesn't make sense?
voz_(1)
Why is this a thing when there is digital publishing? Surely ebooks would be dwarfing physical books now?
Digital textbooks frequently come with expiration dates. So you pay almost the same amount as a paper book, only for it to disappear shortly after the semester is over.
Other digital books cost almost the same as the paper edition. And with DRM frequently baked into the book, you can't pass it on to the next person.
That said, I am somewhat addicted to erotica on Kindle because the books that scratch my itches aren't available in dead-tree editions.
Other digital books cost almost the same as the paper edition. And with DRM frequently baked into the book, you can't pass it on to the next person.
That said, I am somewhat addicted to erotica on Kindle because the books that scratch my itches aren't available in dead-tree editions.
They are, but they have a huge spam problem. So does physical books to an extent, but it's meaningfully worse with e-books.
> The largest five publishers control 90% of the market.
This is not dissimilar to the music market. It used to be controlled by 5 companies, now it's down to three.
The result? Creators are paid peanuts while the blame is shifted away from actual companies controlling the market to someone else.
As a former employee of Storytel, the Swedish audiobook app, I'm really glad for this decision. Penguin Random House already has an insane outsized and rarely positive influence on the market. The merger would've only made things worse.
This is not dissimilar to the music market. It used to be controlled by 5 companies, now it's down to three.
The result? Creators are paid peanuts while the blame is shifted away from actual companies controlling the market to someone else.
As a former employee of Storytel, the Swedish audiobook app, I'm really glad for this decision. Penguin Random House already has an insane outsized and rarely positive influence on the market. The merger would've only made things worse.
It's incredible to me that this is only a 2.2B merger, when I think about how much space in my house is dedicated to books, and how much of my discretionary spending is for books (plus indirect demand through libraries.)
On the other hand, I doubt whether any of the last 10-20 books I've bought were Penguin Random House...
On the other hand, I doubt whether any of the last 10-20 books I've bought were Penguin Random House...
Kudos for some judges with integrity, a rare sight nowadays
Won’t they just appeal and almost certainly find a “friendlier” judge?
You can't shop judges for an appeal.
Depends on the appeal. If you are appealing an in-house FTC judgement, for example, you have the choice of any circuit court that you do business in and can pick the one with the friendliest case law.
OK, I meant "shop for an appellate court." You can certainly shop for a circuit court judge.
I understand that. Replace find with land or receive to understand what I was going for there.
Too bad they couldn't block the Ticketmaster & Live Nation/ClearChannel merger.
> Executives from PRH and Simon & Schuster argued that ... the merger would actually benefit writer pay, because it would lead to savings and allow them to spend more on books.
I snorted at that. This is the same old shtick companies trot out every time they want to do something egregiously anti-consumer--or in this case, anti-creator. That there are apparently still people that this routine works on is a touch depressing, but at least the judge wasn't one of them.
I snorted at that. This is the same old shtick companies trot out every time they want to do something egregiously anti-consumer--or in this case, anti-creator. That there are apparently still people that this routine works on is a touch depressing, but at least the judge wasn't one of them.
This was the quote that got a "are you f'ing kidding me?" from me:
> Penguin Random House lawyer Daniel Petrocelli, who defeated the government in a previous merger challenge, argued during the trial that the deal would have “enormous benefits” for readers and authors alike since the imprints, or brands, owned by the two giants would continue to compete against each other.
Glad to read in the next paragraph that Stephen King got to call that out as "ridiculous" in court.
> Penguin Random House lawyer Daniel Petrocelli, who defeated the government in a previous merger challenge, argued during the trial that the deal would have “enormous benefits” for readers and authors alike since the imprints, or brands, owned by the two giants would continue to compete against each other.
Glad to read in the next paragraph that Stephen King got to call that out as "ridiculous" in court.
> That there are apparently still people that this routine works on is a touch depressing
Each time I think that, I then immediately realize that every year, there's a fresh cohort just becoming adults, who are yet to fall for all these tricks. These things works because there's an endless supply of new marks.
Each time I think that, I then immediately realize that every year, there's a fresh cohort just becoming adults, who are yet to fall for all these tricks. These things works because there's an endless supply of new marks.
Good. This is one step to stop the future from looking like that Internet Archive thing they did for their 25th anniversary: https://wayforward.archive.org/ia2046/.
If only they’d blocked Disney’s acquisitions
Disney doesn’t have as great of pricing power in its much larger relevant market.
Plus, United States v. Paramount in 1948 prevents a lot of the vertical integration that could be achieved in their former markets.
The only other place they can go is the even more crowded market that is online.
Plus, United States v. Paramount in 1948 prevents a lot of the vertical integration that could be achieved in their former markets.
The only other place they can go is the even more crowded market that is online.
As part of a 2019 review of its ongoing decrees, the Department of Justice issued a two-year sunsetting notice for the Paramount Decree in August 2020, believing the antitrust restriction was no longer necessary as the old model could never be recreated in contemporary settings. [1]
[1] https://en.wikipedia.org/wiki/United_States_v._Paramount_Pic....
[1] https://en.wikipedia.org/wiki/United_States_v._Paramount_Pic....
Right decision for the wrong reasons? I think the bidding wars hurt the vast majority of authors, where all the money and energy and physical product space in bookshops gets sucked into a handful of authors leaving the majority of respected, award winning and decent selling authors begging for scraps during their lunch break at their day job. But I don't a merger would have helped at all.
The apple $3+ trillion Apple and Android store duopoly seems like a way bigger problem. At least authors have more choices compared to app developers.
Force them both to allow webassembly PWAs as first class apps! And full access to phone features.
Europe is working on this and the EU recently passed laws to open up digital ecosystems and improve competition and market conditions for smaller players.
While these won't directly apply to other markets and may not even be that successful, such legal precedence have a tendency to spark regulatory and legislative action around the world.
While these won't directly apply to other markets and may not even be that successful, such legal precedence have a tendency to spark regulatory and legislative action around the world.
Penguin Random House?
They mean Bertelsmann https://en.m.wikipedia.org/wiki/Bertelsmann
They mean Bertelsmann https://en.m.wikipedia.org/wiki/Bertelsmann
Oh man remember when Meta / Facebook was a monopoly and we had to do everything in our power to stop them? And now their stock is down 75% in the last 12 months and they are getting beaten up by competitors? And without any government intervention! It's almost like the world is always dynamic and who is on top today isn't on top tomorrow...
Sometimes we get lucky. Smart civilizations don't count on luck.
"There's no need to get the government involved, the person stabbing you in the face will stop when they get tired."
In that case they literally almost always only get involved long after the stabbing is over.
So by that argument allow the merger and if it turns out antitrust fine the ever living shit out of them.
So by that argument allow the merger and if it turns out antitrust fine the ever living shit out of them.
>they are getting beaten up by competitors
Sure? https://news.ycombinator.com/item?id=33407857
Sure? https://news.ycombinator.com/item?id=33407857
stock price being down 70% is not the same thing as losing dominance
Facebook active users have increased so their influence is only increasing.
But I disagree that Facebook is a monopoly -- their market is advertising and there is still plenty of active competition in the online advertising marketplace.
But I disagree that Facebook is a monopoly -- their market is advertising and there is still plenty of active competition in the online advertising marketplace.
These are two giants in a very small oligopoly. I can't see any consumer benefit to a merger, and lots of potential for harm. This is what antitrust law is supposed to be all about.
I suppose you could argue they're in a declining business and need to cut costs. But I don't think either would admit to that.