Authors Guild calls for DoJ  to block Bertelsmann's S&S purchase

Authors Guild calls for DoJ to block Bertelsmann's S&S purchase

The Authors Guild and other writers' groups in the US have written a letter to the Department of Justice calling on it to block Bertelsmann's takeover of Simon & Schuster.

Penguin Random House's owner agreed a $2.2bn deal to buy S&S last November. The merger would see Simon & Schuster continue to be managed as a separate publishing unit under the Penguin Random House umbrella.

However, the guild's letter argues the deal would “bring well more than half of key US book markets under the control of a single corporation, which poses a variety of potential threats to freedom of speech and democracy in the United States”.

It states the resulting company could potentially have more US revenues than the next three largest US publishers combined and the resulting imbalance would lead to less competition for authors' manuscripts. The takeover would result in Bertelsmann controlling a 70% market share in the literary and general fiction market in the US, the letter states.

The letter also argues the takeover would reinforce Bertelsmann's “horizontal power” over book publishing. It gives the example of the company acquiring the last two of Quad/Graphics book manufacturing facilities, leaving independent publishers with only one potential printer for their books.

It also suggests the consolidation would 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 Authors Guild goes on to call for the DoJ  to proactively restructure the entire US market for books to counteract the influence of Amazon’s monopoly over book retail, citing publishers claims they need to merge in order to get sufficient bargaining power against the online giant. “The time has also come to recognize that simply blocking takeovers is no longer sufficient,” it states.

The letter has also been signed by the Open Markets Institute, the Horror Writers Association, the National Writers Union, Novelists Inc, the Romance Writers Association, Sisters in Crime and the Western Writers of America.

Announcing the deal last year, Thomas Rabe, chairman and c.e.o. of Bertelsmann, said he was “confident” the acquisition would be approved by the antitrust authorities.

Asked about the letter, Bertelsmann repeated arguments it made last year, stating the last significant merger in the book industry of Penguin and Random House did not pose competitive concerns. The firm said the US trade book publishing industry is “unconcentrated”, large publishers have lost market share to smaller ones and the market was still “highly competitive” owing to new presses and Amazon's strength. It also cited figures from the Association of American Publishers that the combined share of PRH and S&S would be below 20%.