When Allen Lane set out to create inexpensive paperbacks for commuters in the 1930s, no one imagined he was building what would become the biggest publishing house we have ever seen.
The company he founded became Penguin Books, which in turn became Penguin Random House, following a merger in 2013. Now, in a deal first announced in November 2020, Bertelsmann, the parent company of Penguin Random House, wants to buy another publishing giant, Simon & Schuster.
The proposed merger caught the attention of the Biden administration. The US Department of Justice has filed an antitrust lawsuit, arguing that the merger will reduce advances for authors, result in fewer books being published and offer less variety to consumers.
The trial, which began on August 1, is expected to continue for three weeks. He presented evidence from bestselling author Stephen King, who testified on behalf of the Department of Justice.
The publishers and their lawyers say the deal will create “efficiencies” that will lead to “better deals to more authors.”
The proposed acquisition of Simon & Schuster is the latest in a long history of mergers and acquisitions in what has been described in The New York Times as “increasingly a win-win endeavor in which the biggest companies compete for brand authors and guaranteed bestsellers”.
If allowed, the merger of Penguin Random House and Simon & Schuster will reduce the number of major US publishers from five to four. This begs the question of how much the size is too big.