Antitrust Trial

After the fireworks of the morning opening on Wednesday, when Judge Florence Pan thoroughly disallowed Penguin Random House’s models of the extra money they say they will make after the merger — and share with authors — as being “unverified and unverifiable” the rest of day was a far more plodding parsing of the defense economics expert, Dr. Edward Snyder. His cross-examination continued Thursday morning, also included in this post. The DOJ will bring back their expert Dr. Nicholas Hill for rebuttal, and then the testimony will be complete. Closing arguments will be presented Friday, on schedule. Once again, Judge […]

Further to our report from Wednesday morning on Judge Pan’s rejection of PRH introducing evidence of their projected efficiencies and synergies after the merger, we can now present you with full documentation. The preceding discussion is remarkable on its own, as you can view the judge’s frustration with the defense attorney. Then her actual ruling, which was quite detailed and designed to withstand scrutiny, since it’s likely to be an element of an appeal if it comes to that, is also worth reading and presented here (comprising 24 pages of transcript). Efficiencies discussion Efficiencies ruling

Following PRH executive Manuel Sansigre’s testimony, an S&S spokesperson has clarified and corrected a couple of points. When Sansigre told the court, “We learned from the management presentation of Simon & Schuster that they have presence in 100 countries” and added that “in our case, we have presence in more than 200 countries,” he was speaking about sales of physical books only. S&S reports that for print books and ebooks combined, their titles are available in over 200 countries. PRH has its own “dedicated sales reps across the globe,” whereas S&S uses wholesalers and distributors in some international markets. Additionally, […]

As we reported before the trial began, Judge Florence Pan had clearly been “a little skeptical” about admitting Penguin Random House’s internal expectations of significant cost savings and sales increases following the merger. On Wednesday morning, after another testy exchange with PRH’s attorney Andrew Frackman, Judge Pan ruled for the government and found the efficiencies evidence inadmissible: “The efficiencies projected by Penguin Random House are not substantiated and verified. Although many may be verifiable, some are not.” (We’ll share the full ruling tomorrow; it was quite extensive and thorough, and grounded in both the horizontal merger guidelines and case law […]

The antitrust trial took a pretty striking turn on Monday afternoon for anyone trying to gauge where the case actually stands as it enters its third and likely final week. The defense was questioning their economic expert, Yale professor Dr. Edward Snyder, who was duly explaining why he believes the government’s expert Dr. Nicholas Hill got almost everything wrong: “The government has not proven that there will be a substantial lessening of competition as a result of the merger.” That will likely be the question on which the case hinges. Yes, the merger will give the combined firm half of the […]