US judge blocks $2.2B Penguin Random House merger

Re:US judge blocks $2.2B Penguin Random House merger by AlbertCory on Tuesday November 01, 2022 @12:06AM (#33416780)

Unlike the Staples - Office Depot merger, about which I couldn't care less, or a tech giant stifling smaller competition by buying it:

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.

[ Parent | on HN ]

Re:US judge blocks $2.2B Penguin Random House merger by JumpCrisscross on Tuesday November 01, 2022 @12:37AM (#33416976)

> can't see any consumer benefit to a merge

Economies of scale in production and distribution exist.

> lots of potential for harm

Yes. The scaling economies are dwarfed by the extractive ones.

[ Parent | on HN ]

Re:US judge blocks $2.2B Penguin Random House merger by AlbertCory on Tuesday November 01, 2022 @12:51AM (#33417079)

I think I'm agreeing, depending on what you mean by "extractive."

Scaling economies mainly benefit the shareholders. Possibly they lead to lower prices, or higher royalties to authors, but that's only speculative.

[ Parent | on HN ]

Re:US judge blocks $2.2B Penguin Random House merger by wvenable on Tuesday November 01, 2022 @02:20AM (#33417655)

> Economies of scale in production and distribution exist.

How is that a consumer benefit in the absence of competition?

[ Parent | on HN ]

Re:US judge blocks $2.2B Penguin Random House merger by n4r9 on Tuesday November 01, 2022 @05:28AM (#33418841)

Exactly. There's no incentive to pass efficiency savings on to consumers vs just making more profit.

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.

[ Parent | on HN ]