As of November 2020, Penguin Random House’s owner Bertelsmann has been set to acquire Simon & Schuster in a $2.17bn deal. However, this is not a transaction people are happy with as Bertelsmann comes under scrutiny in the UK and the US.
Authors have been vocal about fearing the fallout if the deal goes through. When the deal was first announced, the US Author’s Guild was quick to object as the acquisition would bring big-name Simon & Schuster authors —such as Hilliary Clinton and Stephen King— under the Penguin Random House umbrella, successfully creating an imbalance in the US publishing industry. The Society of Authors (UK equivalent of an Author’s Guild) expressed similar concerns last month and urged the Competition and Markets Authority to take a look at the deal that could have “a generally anti-competitive effect on prices for consumers and significantly adverse contractual terms for authors.” The Author’s Guild believes that when combined, PHR and S&S would account for about 35% of all book units sold in the US while Bertelsmann argues it would be less than 20%.
The publishers, on the other hand, would receive an extra advantage in their important dealings with Amazon and other book shop chains. Yet, authors would have fewer options in the “big five” publishers in the US if it were cut down to four, effectively increasing competitiveness and making it harder for them to negotiate better deals. According to the Society of Authors, the effect would be similar in the UK. Currently, the UK competition watchdog is investigating the deal.
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