A US Federal judge wrote that the impact of the proposed $2.175 billion deal “may be substantially to lessen competition.”

Paramount Global’s attempt to sell publisher Simon & Schuster to the owner of Penguin Random House has been blocked in an antritrust suit brought by the Department of Justice, so ordered by a Washington D.C. judge on Monday. The companies replied that they’re evaluating options and are looking to request an appeal.

Paramount Global is a giant conglomerate that owns Paramount Pictures, CBS Entertainment, MTV, VidCon, and Simon & Schuster among many holdings.

Simon & Schuster is currently the 4th largest publisher in the world, was the largest publisher for many years, and has been active for 100 years. They have published authors as varied as Ernest Hemingway and Carrie Fisher. They also publish Stephen King, who opposes the merger.

German media giant Bertelsmann is another of the world’s largest media conglomerates, and owns many television and radio channels in Europe, BMG (music label for Céline Dion and The Rolling Stones), a venture capital division, and Penguin Random House. Penguin Random House is already the world’s largest publisher. (The assets are so vast that it’s easier to send you to the Wikipedia page than to list them here.)

The $2.175 billion deal was originally made public by ViacomCBS (before it reorganized as Paramount Global) in November 2020 as part of the Shari Redstone-controlled media conglomerate’s effort to sell off assets that weren’t core to its streaming strategy for Paramount+.

That effort from Paramount also resulted in sales of tech site CNET for $500 million, sale of CBS’ New York BlackRock headquarters building for $760 million, and sale of LA’s CBS Studio City lot for $1.85 billion. The later is mourned by many in the entertainment industry, along with the earlier sale of CBS Television City, all to real estate developers.

“Upon review of the extensive record and careful consideration of the parties’ arguments, the Court finds that the United States has shown that ‘the effect of [the proposed merger] may be substantially to lessen competition’ in the market for the U.S. publishing rights to anticipated top-selling books,” U.S. Circuit Court Judge Florence Y. Pan wrote in a brief, two-page order.

Bertelsmann and Paramount originally expected the deal to close in 2021, but the U.S. government filed a lawsuit in November of 2021 alleging that the deal “would give Penguin Random House outsized influence over who and what is published, and how much authors are paid for their work.”

The high-profile trial was watched closely by the literary world and included testimony from executives of both publishers, who argued that a merger would allow cost-saving opportunities, which would benefit writers.

Authors also testified during the trial, including Stephen King. The acclaimed horror writer, long aligned with Simon & Schuster, argued strongly against the merger, stating that “consolidation is bad for competition” and that “it becomes tougher and tougher for writers to find money to live on.”

“You might as well say you’re going to have a husband and wife bidding against each other for the same house,” King said, according to the Associated Press. “It would be sort of very gentlemanly and sort of, ‘After you’ and ‘After you.”

Other executives from rival publishers, such as Hachette and HarperCollins, also testified against the deal.

“We strongly disagree with today’s decision, which is an unfortunate setback for readers and authors, and we will immediately request an expedited appeal,” Penguin Random House said in a statement.

The case is unusual in that the Department of Justice is protecting the rights of creators for a change, though the public is also affected.

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