On August 25th, Vulture Magazine, a New York based online magazine, released the article “So who won the antitrust trial”, focused on the Department of Justice’s fight against the merger of Penguin Random House and Simon & Schuster. The merger would reduce the industry’s so-called Big Five publishing houses (Penguin Random House, Hachette, HarperCollins, Simon & Schuster, and Macmillan) to four. The theme of the DOJ’s lawsuit opposing the merger is that the merger would create a powerful buyer in publishing rights, limiting authors’ leverage over advances.
The article quotes AAI’s Diana Moss:
“This book publisher merger case focuses on how the merger of Penguin/Simon & Schuster would create a dominant firm that will eliminate competition in publishing rights, to the detriment of writers. A merged Penguin/Simon & Schuster would be a more powerful buyer of book publishing rights. The firm would likely exercise this enhanced market power by lowering advances to authors. Consumers of leading books will ultimately feel the consequences of this harm.”
Moss, who was speaking generally of the case but not specifically about the trial, said this was a unique case compared to other antitrust actions given its focus on labor.
“Antitrust enforcers have, to date, not focused on mergers and anticompetitive practices that harm workers. Rather, they have focused on mergers that directly harm consumers,”
“But many markets are dominated by powerful buyers that exercise substantial market power, as we see in food and agriculture and healthcare — and now here in publishing.”