The Authors Guild Supports DOJ’s Suit to Block Merger of Penguin Random House and Simon & Schuster

Now that the Authors Guild has fully reviewed the DOJ’s complaint and legal claims therein and the Authors Guild Council and Authors Guild Foundation Board have had an opportunity to meet to discuss DOJ’s suit to block the proposed merger between Penguin Random House and Simon & Schuster, it issues this official Position Statement.

On Tuesday, November 2, 2021, the U.S. Department of Justice (DOJ) filed a complaint in the district court of District of Columbia to block Penguin Random House (PRH)’s acquisition of Simon & Schuster (S&S). After reviewing the complaint in detail, the Authors Guild strongly supports the DOJ’s suit and its claims that a large mega-merger among publishers creates a monopsony that harms working authors.

We are heartened by the DOJ complaint’s strong and consistent focus on authors and its understanding of the fact that authors inevitably lose income when there is limited competition for their works, which in turn adversely impacts the reading public because fewer important books are written. In fact, all of society is poorer when consolidation reduces the richness that a multiplicity of perspectives of publishers, editors, and authors offers.

The complaint demonstrates an understanding of how authors earn money in the traditional publishing industry and the importance of advances in providing authors with the necessary time and resources to develop quality books, many of which transform how we see the world and interact with others. Encouraging a vigorous competition of ideas through books is vital in maintaining a democratic society.

The Authors Guild has for many years argued to the DOJ and FTC that consumers are harmed when authors’ incomes decline because authors must take on other work and write less or not at all. Further, as we explained in our letter to the DOJ earlier this year, “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.”

The complaint acknowledges these points and describes how the proposed merger would eliminate the already severely limited competition in the advance-paying market for manuscripts. In recent years, authors have become resigned to the march of consolidation so that now only five big publishers dominate the industry.  This merger would bring that number down to four. The proposed merger would enable the merged firm and the few competitors left to pay less and extract more from authors who often work for years at their craft before producing a book. By reducing author pay, the merger would make it harder for authors to earn a living by writing books, which would, in turn, lead to a reduction in the quantity and diversity of books—which subsequently harms consumers.

As the complaint vividly states, “Authors are the lifeblood of book publishing. Without authors, there would be no stories; no poetry; no biographies; no written discourse on history, arts, culture, society, or politics.”

It bears emphasizing that it is not only best-selling authors—the main focus of the DOJ’s complaint—who are harmed by consolidation, but all traditionally published authors, especially mid-list authors who write many of the important fiction and nonfiction books of our time and already have suffered severe income declines. Consolidation doesn’t just stifle competition, it also makes acquisition editors less willing to take risks on emerging or mid-list authors, voices from overlooked and marginalized communities, authors with unusual or controversial ideas, and literary writers who challenge the status quo both in content and style. Yet it is only by pushing those limits that literature and society advance. Fewer publishers also mean less diversity, as the remaining players chase megasellers and celebrity books with seven-figure advances at the expense of funding smaller, riskier books.

The prospect of yet another devastating merger increases the greatest threat to balance and fair competition in the publishing industry—Amazon, the industry’s true monopsony, and its impact on the entire ecosystem, particularly on authors who ultimately bear the brunt. Amazon’s grip on our industry is the ultimate cause of the recent drive towards further consolidation. Unless the Biden Administration and Congress act to reform antitrust laws in response to Amazon’s anti-competitive behaviors, quashing the proposed PRH/S&S merger will prove to be too little, too late.