Author trade union concerns over PRH and Simon & Schuster merger

17 February 2021

We have written to the Competition & Markets Authority and the Department for Business, Energy and Industrial Strategy expressing concerns about the proposed $2.2 billion acquisition of US publisher Simon & Schuster by German conglomerate, Bertelsmann, which owns Penguin Random House.

The merger, which is due to be considered by US regulators later this year, would see Bertelsmann enjoy a 70% market share in US literary and general fiction markets, with 60% of the biography market and 70% of other key non-fiction markets.

The move follows a letter sent by the Authors Guild, the National Writers’ Union and others last month to the US Department of Justice expressing similar concerns.

If approved by regulators, the merger would bring over half of key US markets under the control of a single corporation and would have a similarly profound effects on UK markets, with 2019 BookScan data indicating joint sales of some £374 million between PRH (£346 million) and S&S (£27 million), calling into question whether the newly merged company would enjoy unlawful levels of market dominance.

Commenting on the potential deal, SoA Chief Executive Nicola Solomon, said:

“We are calling on the UK government agencies to express our grave concerns to their US counterparts about this merger.

“Penguin Random House is already the largest publishing house in the UK market. The acquisition of Simon & Schuster as the UK’s ninth biggest publisher will further skew the market at an already difficult time for authors and independent presses.  

“We cannot have a larger player in the market driving down contractual terms for authors, nor is it reasonable to expect for fewer participants in the market to publish the diverse range of voices consumers so desperately want to see.

“Publishing is a risk-management business and our worry is that fewer publishers will lead to fewer voices being heard, to say nothing of the potentially harmful effects on authors’ terms at any already difficult time.

“The Department for Buisness, Energy and Industrial Strategy and the Competition & Markets Authority need to work together urgently to review this deal and add their voices to the increasing chorus of concerns from US unions and civil society groups. If approved, the deal is potentially bad for business, readers and authors alike.”