Merger of Dominant Printers Poses Yet Another Threat to U.S. News Media; Open Markets Calls on Justice Department to Block Deal
March 6, 2019
Today, Open Markets has sent a letter to the U.S. Department of Justice (DOJ) calling for the DOJ to block printer Quad/Graphics’ (Quad) plan to buy its biggest competitor, LSC Communications (LSC), for $1.4 billion. The letter, signed by Open Markets, the Authors Guild, PEN America, and addressed to Assistant Attorney General Makan Delrahim, explains how the combination of Quad and LSC is a merger-to-monopoly in the long-run magazine printing market and an anticompetitive merger in the book printing market.
The merger comes at a time when many magazines have re-committed to print. Last year, Rolling Stone, National Geographic, and Fast Company all announced redesigns of their print magazines. Similarly, the print book industry has rebounded strongly from Amazon’s push to drive readers to e-books. Sales of print books have increased every year since 2013 while the number of independent bookstores has risen 50 percent from 2009 to 2018.
In addition to the printing of magazines, a merger between Quad and LSC also threatens to combine the only two major distributors of print magazines in the country. As the dominant firm in distribution, a combined Quad-LSC would have even greater power to exclude both current and potential rival printers from challenging its position. This means there is little help for relief for long-run magazines any time in the foreseeable future.
A combination of Quad and LSC merger would also hurt book publishers. Quad and LSC are the only two major printers of trade books – which are books published for a general audience – and educational textbooks. Recent press reports have highlighted how lack of printer capacity is already leading to shortages of best-selling books.
The letter from Open Markets, the Authors Guild and PEN America emphasizes to the DOJ that the Quad-LSC merger-to-monopoly completely fails to satisfy a “failing firm defense,” as laid out in the DOJ’s Horizontal Merger Guidelines. What the merger would do is to make it even more expensive and more difficult for American citizens to disseminate ideas and opinions. As such, the merger is a clear and present threat to American democracy and must be blocked.
Press Contact: Stella Roque at Open Markets Institute, [email protected]