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Illustration: Sarah Grillo/Axios

The Department of Justice filed suit on Tuesday to prevent Penguin Random House — a subsidiary of German publishing giant Bertelsmann — from acquiring rival publisher Simon & Schuster.

Why it matters: This isn't a standard anti-monopoly case. Quite the opposite, in fact: It's an anti-monopsony case, which shows that the DOJ — and the Biden administration more broadly — is willing to push the envelope of antitrust enforcement.

The big picture: The two publishers combined would control "more than two-thirds" of the money paid to authors of "anticipated top-selling books," per the DOJ. (Penguin Random House disputes that math.)

  • That kind of market concentration would make the combined company qualify as a monopsony — a company where one buyer is the dominant purchaser of a product coming from many suppliers (in this case, authors).
  • At the heart of the government complaint is something called the “hypothetical monopsonist” test — an undisputed part of antitrust law, but also one that has rarely been used in recent legal cases.

Between the lines: The main harm being alleged in the complaint is a harm to workers — authors who could end up receiving less money when there are fewer bidders for their work.

  • "This is the DOJ saying they are prepared to bring at least some labor side monopsony cases," says Rebecca Haw Allensworth of Vanderbilt Law School. "Even though the statutes and the case law would support the idea, it is a departure from how things have been going in the past 40 years."

The other side: There would still be four big publishers even after the merger, and Bertelsmann claims that author advances rose, rather than fell, as a percentage of revenue after Random House bought Penguin in 2013.

  • Bertelsmann also has promised that Penguin Random House and Simon & Schuster will continue to bid against each other in book auctions — a pledge that the DOJ says "defies economic sense, can be evaded or violated without detection, and is unenforceable."

The bottom line: The DOJ's aggression in this case does not come from incoming antitrust chief Jonathan Kanter, who has yet to be confirmed; it also doesn't come from FTC chief Lina Khan.

  • Be smart: The action, instead, reflects the broad priorities of the Biden administration and Attorney General Merrick Garland.

Go deeper: DOJ sues to stop Penguin Random House's acquisition of Simon & Schuster

Go deeper

Updated Nov 4, 2021 - Politics & Policy

Payments to families separated at border still being negotiated, White House clarifies

Photo: Drew Angerer/Getty Images

The White House clarified Thursday that negotiations are ongoing for payments to families who were separated at the border under the Trump administration.

The latest: The Wall Street Journal first reported that the Justice Department was in talks to pay $450,000 per person to settle lawsuits filed on behalf of the families affected. When asked about the payments this week, President Biden had said, "That's not going to happen." Deputy Press Secretary Karine Jean-Pierre said Thursday his response was to the $450,000 figure and not the payments themselves.

Updated 15 hours ago - Sports

The potential GOAT of chess faces intriguing challenger

Illustration: Sarah Grillo/Axios

The World Chess Championship between Norway's Magnus Carlsen and Russia's Ian Nepomniachtchi began on Friday, 1,094 days after Carlsen won his fourth consecutive title.

Why it matters: During the long, COVID-fueled layoff, chess entered a new era, and with the championship finally here, the age-old game is ready for its close-up.

Department of Interior proposes raising cost of drilling on public lands

A horizontal drilling rig and a pump jack sit on federal land in Lea County, New Mexico. Photo: Callaghan O'Hare/Bloomberg via Getty Images

Oil and gas companies should pay more to drill on federal lands and waters, the Department of the Interior argued in a report released Friday, saying that the current rates were "outdated."

Driving the news: The Department of Interior report said that the federal government's oil and gas leasing and permitting program "fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers."