Publishing, Healthcare Mergers Set for Trial in Antitrust Showdown With Biden Administration
Judges to hear Justice Department’s challenges to Penguin Random House’s acquisition of Simon & Schuster and a deal involving UnitedHealth Group.
Two merger trials, each beginning Monday at the federal courthouse in Washington, D.C., will provide an early test for Biden administration antitrust enforcement and determine the fate of multibillion-dollar deals in the publishing and healthcare industries.
In one case the Justice Department is challenging book publisher Penguin Random House’s nearly $2.18 billion acquisition of Simon & Schuster, a deal that would combine two of the industry’s big-five publishers. In the other, the department is seeking to blockUnitedHealth Group Inc., UNH 1.32%▲ the parent of the nation’s largest insurer, from acquiring health-technology firm Change Healthcare, CHNG -0.35%▼ a deal valued at $13 billion.
The lawsuits are part of the Biden administration’s push to be more aggressive in bringing cases against deals that it believes will suppress competition. In the publishing case, the department argues the merger will hurt authors, especially bestselling ones, by reducing the number of publishing houses that compete for their work. Among its expected witnesses is Stephen King, a longtime Simon & Schuster author who has voiced support for the government’s challenge.
In the healthcare litigation, the department argues UnitedHealth’s acquisition would give it access to sensitive industry data that it could use to harm competitors. The companies in both matters deny the allegations and say the government misunderstands their industries.
The cases represent a conscious strategy by the Justice Department to expand the frontiers of merger enforcement, said William Kovacic, law professor at George Washington University and former chairman of the Federal Trade Commission.
“The stated objective of the government is to reclaim enforcement terrain that had been surrendered,“ Mr. Kovacic said. “Both of these cases have elements that are intended to push the boundaries of antitrust law outward.”
The publishing case, being heard by U.S. District Judge Florence Pan, an appointee of President Biden, comes amid years of industry consolidation. Penguin Random House, itself the result of a 2013 merger, is today the world’s largest consumer-book publisher, boasting such top-selling authors as John Grisham, Ibram X. Kendi, and Margaret Atwood in the U.S.
German media company Bertelsmann SE, which owns Penguin Random House, agreed in November 2020 to buy Simon & Schuster from ViacomCBS—now called Paramount Global.
Through July 16, Penguin Random House accounted for about 22% of all print books sold in the U.S., according to book tracker NPD BookScan, while Simon & Schuster, whose authors include Mr. King, Colleen Hoover and Bob Woodward, accounted for 9%.
In court papers, the defendant publishers argue the industry is robust, with smaller publishers outpacing one or more larger rivals in book acquisitions every year. They also say their merger would benefit authors and consumers by combining Simon & Schuster’s popular backlist of titles with Penguin Random House’s “industry-leading distribution structure and administrative systems.”
“Slice and dice the market any way you want, and you will find vigorous competition to acquire books, especially books that one or more publishers believe are most likely to succeed with consumers,” the companies wrote.
The Justice Department, which filed suit last November, argues a combination of the two companies would create an entrenched giant that will “dominate the U.S. publishing industry with revenues twice that of its next closest competitor.” Unlike the typical case that centers on a merger’s likely impact on consumer prices or product quality, the government focuses on in-demand writers.
“The evidence will show that the proposed merger would likely result in authors of anticipated top-selling books receiving smaller advances, meaning authors who labor for years over their manuscripts will be paid less for their efforts and fewer authors will be able to earn a living from writing,” the department wrote in court papers.
出版、医疗保健合并将在与拜登政府的反垄断摊牌中进行审判
法官将听取司法部对企鹅兰登书屋收购 Simon & Schuster 的挑战以及涉及联合健康集团的交易
西蒙与舒斯特的长期作家斯蒂芬金预计将代表政府作证，以阻止企鹅兰登书屋收购该公司。
两项合并审判将于周一在华盛顿特区的联邦法院开始，这将为拜登政府的反垄断执法提供早期测试，并确定出版和医疗保健行业数十亿美元交易的命运。
在一个案例中，司法部正在挑战图书出版商企鹅兰登书屋以近 21.8 亿美元收购 Simon & Schuster 的交易，该交易将合并该行业的两大出版商中的两家。另一方面，该部门正在寻求阻止UnitedHealth Group Inc., UNH -1.46%▼（美国最大保险公司的母公司）收购健康技术公司Change Healthcare, CHNG 0.12%▲ 价值130亿美元的交易。
这些诉讼是拜登政府推动更积极地对其认为会抑制竞争的交易提起诉讼的一部分。在出版方面，该部门认为，合并将减少竞争作者作品的出版社数量，从而损害作者，尤其是畅销书作者。在其预期的证人中，斯蒂芬金是西蒙与舒斯特的长期作家，他表示支持政府的挑战。
在医疗保健诉讼中，该部门认为 UnitedHealth 的收购将使其能够访问敏感的行业数据，这些数据可能会用来伤害竞争对手。两家公司都否认了这些指控，并表示政府误解了他们的行业。
乔治华盛顿大学法学教授、联邦贸易委员会前主席威廉科瓦契奇表示，这些案件代表了司法部扩大兼并执法范围的有意识战略。
科瓦契奇说，“政府的既定目标是收复被缴械的执法区域。”“这两起案件都有向外拓展反垄断法边界的元素。”
由拜登总统任命的美国地方法官弗洛伦斯·潘（Florence Pan）审理的出版案是在多年的行业整合之际进行的。企鹅兰登书屋本身是 2013 年合并的结果，如今是世界上最大的消费类图书出版商，在美国拥有约翰·格里沙姆、Ibram X. Kendi 和玛格丽特·阿特伍德等畅销书作家。
企鹅兰登书屋的母公司、德国传媒公司贝塔斯曼于2020年11月同意从维亚康姆哥伦比亚广播公司(现称为派拉蒙全球公司)手中收购西蒙与舒斯特出版社。
图书跟踪机构NPD BookScan的数据显示，截至7月16日，企鹅兰登书屋的图书销量约占美国所有纸质图书销量的22%，而由金、科琳·胡佛(Colleen Hoover)和鲍勃·伍德沃德(Bob Woodward)等作家组成的西蒙与舒斯特(Simon & Schuster)的销量占比为9%。
在法庭文件中，被告出版商认为该行业很强劲，每年在图书收购方面，规模较小的出版商都超过了一个或多个较大的竞争对手。他们还表示，他们的合并将通过将 Simon & Schuster 广受欢迎的书名后备清单与企鹅兰登书屋的“行业领先的分销结构和管理系统”相结合，使作者和消费者受益。
两家公司写道：“以任何你想要的方式切分市场，你会发现购买书籍的竞争非常激烈，尤其是一家或多家出版商认为最有可能在消费者中取得成功的书籍。”
去年 11 月提起诉讼的司法部认为，两家公司的合并将创建一个根深蒂固的巨头，“以两倍于最接近的竞争对手的收入主导美国出版业”。与集中在合并可能对消费者价格或产品质量的影响的典型案例不同，政府关注的是需求旺盛的作家。
司法部在法庭文件中写道:“证据将表明，拟议中的合并可能会导致预期畅销书籍的作者获得的预付款减少，这意味着多年来为他们的手稿付出努力的作者将得到更少的报酬，更少的作者将能够通过写作谋生。
Citation: Publishing, Healthcare Mergers Set for Trial in Antitrust Showdown With Biden Administration
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