It also can informally provide higher rewards to those who comply. How can a court tell if the corporation informally penalizes divisions or individuals that compete “too hard” with other divisions? Unless some executive simply admits to violating the rule in emails, what would be the evidence? All the corporation really needs to do to affect incentives is to provide some compensation on the basis of corporate profits, not just divisional profits. Even if Penguin’s promise were legally binding (which it is not), it is effectively unenforceable by a court. Moreover, Penguin’s “we promise to compete against ourselves” remedy directly conflicts with the Copperweld doctrine in antitrust law, which mandates that divisions of a corporation be treated as a single actor.
But she is asking the right questions, including challenging Penguin’s claimed to have such a policy in the past when other evidence suggested that some supposedly competing in-house bids had been coordinated. Judge Pan has not yet ruled on Penguin’s promise that its publishing divisions will compete against each other post-merger in bidding for new books. Neither independently verified the savings, rendering the claims insufficient. Judge Pan found that the defendants’ efficiencies witness and its economic expert simply accepted at face value claimed cost savings generated in-house.
For efficiency claims to win the day, antitrust precedent and the joint DOJ-FTC Horizontal Merger Guidelines require that they be verified, merger-specific and sufficient to reverse any anticompetitive harms from the merger. Indeed, she already has properly rejected Penguin’s efficiency defense. Judge Pan seems appropriately skeptical of both arguments. In any event, our internal, unverified analysis demonstrates that the efficiencies from the deal dwarf any anticompetitive concerns, and of course, those savings will be shared with consumers.We will continue to compete vigorously, even if the merger creates market power, or in this case, our divisions will still compete against one another-even though we will own them both and.Parties defending mergers in concentrated markets routinely say “trust us” that: This case highlights two shopworn defenses in horizontal mergers that warrant judicial skepticism. After further briefing, Judge Florence Y. The preliminary injunction hearing in the Department of Justice complaint to block the acquisition of Simon & Schuster publishers by Penguin Random House has just ended. Blessing this kind of remedy would make publishing more akin to professional wrestling, whereas real competition is needed to benefit authors and readers. They also have promised that their publishing divisions would compete against each other. In trying to get their merger approved, Penguin and Simon & Schuster claimed massive, but unverified cost savings.
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