As you know, in November 2020, Bertelsmann announced its plans to acquire Simon & Schuster, which would take the number of Big Five publishers down to four. In response, the Authors Guild, Open Markets Institute, Horror Writers Association, National Writers Union, Novelists Inc., Romance Writers Association, Sisters in Crime, and Western Writers of America have sent the following letter to Richard Power, Acting Attorney General of the Antitrust Division at the Department of Justice, urging the DOJ not to approve the proposed acquisition and detailing the potential negative impact such a merger would have if approved.
Among the most serious concerns are:
- The merger between Bertelsmann’s Penguin Random House and Simon & Schuster would create an unbalanced industry with one grossly outsized company, which, among other things, will inevitably lead to less competition for authors’ manuscripts. The takeover would, for instance, result in Bertelsmann controlling an incredible 70% market share in the literary and general fiction market in the United States. Bertelsmann would also control 70% of the action and adventure, horror, political, legal, medical, erotica, and coming-of-age submarkets and 60% of biography.
- The book publishing industry plays a uniquely important role in protecting democratic freedoms of speech and expression, which in turn makes anti-monopoly enforcement of the utmost importance.
- This takeover would reinforce Bertelsmann’s recent vertical expansion into activities that reinforce its horizontal power over book publishing. Just this November, for instance, Bertelsmann acquired the last two of Quad/Graphics book manufacturing facilities, leaving independent publishers with only one potential printer for their books. Bertelsmann’s proposed takeover of Simon & Schuster would only worsen the problem.
- The proposed consolidation will also lead to increased leverage and price squeezing over authors, increased concentration of power over independent retailers, and a sharp curtailing of the “diversity and quality of carefully written, well-edited books available to the public.”
The letter also goes on to urge the DOJ to proactively restructure the entire U.S. market for books to counteract the outsize influence of Amazon’s monopoly over book retail, given arguments that publishers need to merge to have any bargaining power.
A copy of the letter is below.