This is “the” trial of the summer in publishing. The US government opposes the acquisition announced in the fall of 2020, for 2.18 billion dollars (2.2 billion euros), of Simon & Schuster – put up for sale by the ViacomCBS group, which has since become Paramount Global – by Penguin Random House, the leading US and global publisher, subsidiary of Bertelsmann.
The pleadings started on 1er August in the United States Court for the District of Washington and are expected to continue through the end of the month. The administration of Joe Biden, hostile to excessive concentrations, has filed a lawsuit through the United States Department of Justice (DoJ) to try to block this operation which would give rise, according to its conclusions, to a juggernaut endowed with a “disproportionate influence on the nature of the books published and the remuneration of their authors”.
The problem arises in terms of gigantism and market share: the group resulting from the merger would monopolize 31% of the sales of printed books sold in the United States, according to the NPD BookScan institute, but above all half of the best- sellers. The DoJ highlights the risk of formation of a ” oligopoly “. The question of the diversity of the offer offered to readers, just like the fate of writers, is also of great concern to the government. “Fewer authors could live from their work”, thus assures the DoJ.
Penguin Random House publishes about 2,000 new titles a year, while Simon & Schuster, the fourth of the “Big Five” (the five largest American publishers) releases a thousand, including those by its flagship authors such as John Irving, Bob Woodward or Don DeLillo. This club of five would be reduced to four. Or more exactly to a huge one – resulting from the merger between the first and the fourth – and three big ones (Hachette Book Group, HarperCollins and Macmillan).
“Less variety for the consumer”
The entire elite of American publishing is called upon to take the stand during this trial: the CEOs of major publishing houses, the most prominent literary agents (like Andrew Wylie or Gail Ross ), as well as a host of famous writers. Among them, Stephen King, currently published by Simon & Schuster, expressed his concerns on Thursday August 4th. “Consolidation is bad for competition. When I started [voici cinquante ans], there were hundreds of publishers. One by one, they were swallowed up by others, who put the key under the door”, he asserted.
The new merged entity would represent 70% of the billion dollars in advances given to writers on average each year
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