Antitrust Trial

The DOJ finished calling their witnesses in the antitrust trial on Wednesday morning, with the end of testimony from economist Dr. Nicholas Hill (who will be called again during rebuttal) and a video deposition from literary agent Christy Fletcher. Defense counsel Oppenheimer again challenged Hill’s models and the data input to them. Hill used the minutes of editorial meetings at 12 S&S imprints (out of 38) and 13 PRH imprints (out of about 100) to determine how often one party bids, and if they lost, how often the other was the winner. (Oppenheimer: “This was hard work for you right?” […]

The DOJ’s expert economist Dr. Nicholas Hill resumed testifying on Tuesday (and continues again on Wednesday morning), discussing his prediction of harm if the merger goes through and being questioned on the accuracy of his models. Overall, Hill believes that the proposed mitigating factors—mainly the bidding pledge—are “unlikely to affect the anticompetitive effect of the transaction.” Hill’s reasons are built on qualitative evidence in the form of internal PRH and S&S emails. First, already “imprints can and do coordinate” before and during a bid. As an example, an email from the president of a PRH imprint said that bidding against […]

The antitrust trial began Tuesday morning with testimony from another ceo–Brian Murray from HarperCollins. He said that News Corp.’s bid for Simon & Schuster “was not close” to Bertelsmann’s offer and that he was “shocked” that they were willing to pay $2.175 billion. “We’ve probably done five or so acquisitions and tend be very disciplined in our financial modeling, so we could not find a way to have a return at that price.” (We’ll say it one more time: PL has previously reported that people familiar with the same said the underbidder was Vivendi, not HarperCollins.) In his direct examination, […]

In the Monday afternoon session of the A3 antitrust trial, the government’s antitrust economics expert Dr. Nicholas Hill began his testimony — which resumes Tuesday, after the court hears from HarperCollins ceo Brian Murray. He walked everyone through the Herfindahl-Hirschman index, the hypothetical monopsonist test, diversion ratios, second-score auction models, GUPPI analysis and more. The day’s “I am Spartacus moment” came towards, when the ever-direct Judge Pan said: “So not being a Ph.D. in economics, I don’t really understand the intricacies of these models. And I’m wondering if the dispute between the experts is more about the inputs as opposed […]

The A3 trial continued on Monday with Daniel Petrocelli for PRH requesting the possibility of additional time to argue their case. Closing arguments had been scheduled for August 19 and the government expects to rest at the end of the day Tuesday, running ahead of schedule. But if the trial is running late, Judge Pan will consider allowing testimony to continue through next week and hold closing arguments on Monday August 22. The morning featured another ceo on the stand, Don Weisberg at Macmillan, who continually described publishing as a “business of passion.” He said that the sales department is […]

As indicated in earlier interim posts, Penguin Random House ceo took the stand for much of Thursday in the A3 antitrust trial. The DOJ’s John Read led the questioning for the first time, and much of his questioning of Dohle was based on, and bounded by, a number of key documents — which meant Dohle’s answers were more direct than many of his predecessors in the trial. The point of the exercise, from the government’s perspective, was to introduce documents that reinforce some of the main arguments they have been trying to establish, for Dohle to confirm and offer context […]