US judge blocks $2.2B Penguin Random House merger
theguardian.com
theguardian.com
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.
Economies of scale in production and distribution exist.
> lots of potential for harm
Yes. The scaling economies are dwarfed by the extractive ones.
How is that a consumer benefit in the absence of competition?
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.
Scaling economies mainly benefit the shareholders. Possibly they lead to lower prices, or higher royalties to authors, but that's only speculative.
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.
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.
Would you please explain what exactly doesn't make sense?
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.
On the other hand, I doubt whether any of the last 10-20 books I've bought were Penguin Random House...
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.
> 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.
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.
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.
[1] https://en.wikipedia.org/wiki/United_States_v._Paramount_Pic....
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.
They mean Bertelsmann https://en.m.wikipedia.org/wiki/Bertelsmann
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.
So by that argument allow the merger and if it turns out antitrust fine the ever living shit out of them.