A publishing merger is possibly about to violate American antitrust laws, according to the U.S. Justice Department
Penguin Random House, the largest American publishing company and largest publishing company in the world, is in talks to buy Simon and Schuster, the publisher of Stephen King and most American political writers. Both companies are members of the Big Five, the five publishing houses that dominate the American market.
According to the antitrust suit filed by the Department of Justice on November 2, 2021, the merger would give German-owned Penguin “outsized influence” over two important factors: what books get published, and how much authors are paid.
“If the world’s largest book publisher is permitted to acquire one of its biggest rivals, it will have unprecedented control over this important industry,” Attorney General Merrick Garland said. “American authors and consumers will pay the price of this anticompetitive merger — lower advances for authors and ultimately fewer books and less variety for consumers.”
The publishing merger is Penguin’s next move in the chess game of publishing houses against the rising dominance of Amazon, which began publishing ebooks in 1995, undercutting conventional publishing.
“DOJ’s lawsuit is wrong on the facts, the law, and public policy,” said Daniel Petrocelli, Penguin Random House’s lawyer. “Importantly, DOJ has not found, nor does it allege, that the combination will reduce competition in the sale of books.”
The issue of course, is less about the sale of books and more about not having a single massive gatekeeper on what and who gets published, and what the authors are paid.
The Justice Department “is willing to use its full authority to combat the wave of consolidation swallowing the American economy,” according to Sarah Miller, executive director of the American Economic Liberties Project, an organization that advocates for government action against business concentration.
“This case also reflects how Amazon’s dominance looms as a predatory presence for most firms in the economy,” said Miller. “The CEOs of the number one and number three publishers openly sought to use this merger to become an ‘exceptional partner’ to Amazon.”
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