This month, the book world is watching closely to see what happens when Penguin Random House, the world’s largest book publisher, attempts to acquire Simon & Schuster, the world’s fourth largest publisher, turning what is known as the Big Five publishers into the Big Four and making the PRH-S&S combo a disproportionately gigantic entity in comparison to its competitors. The DOJ v PRH trial concerns author rights; beyond its implications for governmental antitrust legislation, the outcome will set a precedent for author compensation. Here’s what authors (and readers) need to know about the case. 

A brief history of the trial: back in November of 2020, Penguin Random House’s parent company, Bertelsmann, won the bidding for Simon & Schuster, announcing that they would be acquiring the company for $2.2 billion. A year later, the US Department of Justice sued to block Bertelsmann from buying Simon & Schuster, claiming that it would “result in substantial harm to authors.” The trial began on August 1st, 2022, and is set to run for nearly three weeks. 

Now a quick rundown of the business of publishing when it comes to acquiring books: when there is a book that many publishers believe will be successful, and therefore that multiple publishers want, publishers bid ins a book auction. The bids from each publisher detail royalty rates and, importantly for this case, author advances.

Back to the trial. Concerning authors, the central argument from the DOJ is that a merger between two of the Big Five would result in decreased competition among different publishers, which would then reduce the amount that publishers have to pay to acquire books, therefore reducing the authors’ advances. The DOJ is most concerned with what they call “highly-anticipated books,” books that publishers generally believe will be bestsellers. These are books with advances in the six-plus figure range, advances from which authors make a living. The DOJ’s complaint states: “Post-merger, the two largest publishers would collectively control more than two-thirds of this market [of highly-anticipated books], leaving hundreds of authors with fewer alternatives and less leverage.” In the eyes of the DOJ, the merger could greatly harm authors, especially those whose primary source of income comes from their writing.

While the trial concerns the authors of these highly-anticipated books, its results will be important for all authors because it will solidify the amount of power they hold in an industry of which they’re at the heart. Are there people advocating for their stories, or are they subject to the overpowering forces that control the industry? 

Additionally, with decreased competition and the existence of one central, dominating force in the book industry in the form of PRH (with S&S), the DOJ argues that the variety of the books that get published will decrease as well. On the one hand, the potential lowering of author advances would reduce the diversity in the types of authors who can publish, and on the other hand, PRH would simply “exert outsized influence over which books are published in the United States,,” the complaint states, due to its disproportionate size as a publisher.

If one publisher exerts outsized influence, it becomes more than an issue of authors’ rights; it becomes an issue of freedom of information. The DOJ is investigating the question of who decides which narratives the public can access. Beyond its general push for antitrust legislation, with this trial the government is acknowledging the pivotal role books play in informing our society and the importance of uplifting and bolstering access to as many different stories as possible. 

Not surprisingly, representatives of Penguin Random House and Simon & Schuster have countered both of these points during the trial so far. The CEO of S&S, Jonathan Karp, has argued that competition between PRH and S&S wasn’t particularly robust, though he was unable to provide evidence on this point, and even he emphasized the general benefit of competition for authors. The CEO of PRH, Markus Dohle, emphasized the close relationship between a publishing house and its authors and agents, claiming that PRH wouldn’t break that trust by lowering bids, though he’s unable to provide evidence to guarantee that. A few different agents made the claim that it’s not all about the advance; when creating a book, the goal is to sell millions of copies, and the combined resources of PRH and S&S could help a book achieve this type of success. PRH lead attorney Daniel Petrocelli even argued against the very idea that “highly-anticipated books” are a defined market in which there could be competition. In reality, the advance publishers pay for a book doesn’t determine how well a book will sell, though of course there’s a correlation. 

While it cannot be known for sure how the merger would actually impact author compensation, the decision made in the trial and what happens after may clarify the way in which the Big Five (or Four) dictate the fates of prolific authors, and therefore who holds the power in determining which stories get told. 

This case may also bring to light just how much the biggest publishers influence what books are out there; merging two of them creates an entity with what the government worries is total control over the industry. It’s been made clear that the competition is really only between the Big Five to begin with. The case therefore implicitly emphasizes a need to decentralize publishing; there should be far more than four or five publishers controlling the stories that create our world. The DOJ’s argument against the merger holds true in this broader context: a larger number of publishers with a more even distribution of influence would allow for a larger variety of books to be published, whether that’s due to higher author advances thanks to more competition or to a larger variety in publishers’ tastes and approaches.

As authors and readers, it’s important to know about the deeply hierarchical structures through which we get our stories, and to think critically about how the DOJ v PRH trial may impact these stories and their tellers, for better or for worse. 

By Muse Thalia