And with respect to negotiating power, there’s simply no guarantee that the benefits of publishers’ stronger bargaining power would be a boon for authors. ![]() But the former can be achieved without the merger. A larger publishing house would have, in theory, more ability to compete with Amazon and exercise more leverage when negotiating with them. This is especially true when considering Amazon’s power in the ebook market. But it makes sense: Amazon’s dominance in online retail makes it essential for publishers to have a cozy relationship with them. This private admission is almost comical. From the complaint:Īlthough Defendants have publicly suggested that the merger is necessary to create a stronger counterweight to Amazon, Penguin Random House’s Global CEO privately admitted that he “never, never bought into that argument” and that one “oal” after the merger is to become an “xceptional partner” to Amazon. But given the allegations made in the complaint, it appears to be a stalking horse. It’s not a point that can be dismissed on its face. ![]() To begin with the justification for the merger related to Amazon, it’s simply not the case that this was part of the calculus for the merger. The DOJ focuses on a few violations: high barrier to entry into the market, no market efficiencies will be created to outstrip potential harms, lack of counterweight to “Amazon’s alleged buying power,” and anticompetitive behavior that is not compatible within the terms of the merger. Collectively, the two companies would control more than two thirds of the entire market, creating an anticompetitive landscape that, in the words of the DOJ, “would give Penguin Random House outsized influence over who and what is published, and how much authors are paid for their work.” A lack of competition and diversity in determining who and what is published is obviously bad for authors (who would suffer from a pay cut if they are lucky enough to get published), but just as bad for a public denied the opportunity to read the fruits of their labor. book market for acquisitions and their next closest competitor would be less than half their size. If this merger goes through, Penguin Random House would control more than half of the U.S. In the lawsuit, the DOJ makes clear that this merger would hurt authors and the public, particularly focusing on best selling authors. ![]() Last month, the Department of Justice filed a lawsuit against Penguin Random House and Simon & Schuster over the proposed merger of the two major publishing houses.
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