Welcome to Compliance Hot Spots, our weekly snapshot on white-collar, regulatory and compliance news and trends. The Justice Department is going to court next week to challenge the proposed merger of two giants of book publishing, and they've got Stephen King on their side. We have a preview. Plus, a look at what's driving sky-high lobbying revenues, and who's representing high-profile defendants charged this week in an insider trading blitz. Please get in touch with tips and feedback. Contact me at [email protected] and @AGoudsward on Twitter.

The E. Barrett Prettyman U.S. Courthouse, home of the U.S. Court of Appeals for the District of Columbia Circuit and the U.S. District Court for the District of Columbia, on Saturday, June 6, 2020. Photo: Diego M. Radzinschi/ALM

DOJ Takes Publishing Giants to Trial in Key Antitrust Test

The Justice Department's antitrust division faces a major courtroom test beginning next week as it seeks to use a rarely used legal theory to block the merger of two top book publishers, Penguin Random House and Simon & Schuster.

DOJ's argument is not that the proposed merger would harm book consumers, but rather that the merger of two of the so-called "Big Five" dominant publishing companies would stifle competition for what the government has termed "anticipated top-selling books" and the authors who write them.

"The evidence will show that the proposed merger would likely result in authors of anticipated top-selling books receiving smaller advances, meaning authors who labor for years over their manuscripts will be paid less for their efforts and fewer authors will be able to earn a living from writing," the Justice Department wrote in its pretrial brief.