Two publishers, one powerhouse. Would Penguin Random House and Simon & Schuster be too powerful if they became one publisher? On Monday, a lawsuit began in the United States that revolves around that question.

Penguin Random House, America’s biggest publisher, wants to buy rival Simon & Schuster for $2.2 billion (2.15 billion euros). Simon & Schuster is the fourth largest publisher in the United States. Together, the companies publish a trio of best-selling authors: Zadie Smith, John Grisham, Margaret Atwood and Stephen King, to politicians like Michelle and Barack Obama and Hillary Rodham Clinton.

According to the US government, the merger of the two companies threatens competition in the publishing world. The government has initiated competition proceedings to block the takeover. Three weeks have been set aside to hear all concerned.

Together, the charges read, the publishers became “by far” the largest publisher in the US, “surpassing its competitors”. A major objection that the US government has against such a mega-publishing company It can penalize teachers financially. Currently, publishers, especially promising authors, are still bidding against each other to land an author.

Less competition

If a large part of the book market is in the hands of a mega-publisher, the fear is that such competition for writers will decrease. This would threaten the survival of the entire book trade and of authors in particular.

This merger will threaten the survival of the entire book trade and of authors in particular

“Teachers depend on such advances to write and pay their bills.”

According to both publishers, there is still plenty of competition after the acquisition. Currently, there are five major publishers in the United States, known as the Big Five, which also applies to the largest technology companies. Apart from Penguin Random House (PRH) and Simon & Schuster (S&S), these are HarperCollins, Hassett and Macmillan. Tech and media giants like Amazon and Disney also publish books. Additionally, PRH chairman Markus Dohle defended himselfEditors of PRH and S&S will be allowed to bid against each other in book auctions after the merger.

Action should be taken against corporates

Penguin Random House publishes about 2,000 books annually under 90 publisher titles, while Simon & Schuster publishes about 1,000 titles under more than 30 publisher brands.

Biden’s administration wants tougher action Against the emergence of corporate entities that make competition difficult or impossible. There is also a rival case against insurer UnitedHealth Group’s acquisition of health technology firm Change Healthcare.

What will happen to Simon & Schuster if the acquisition does not go through? Either way, the current owner, Paramount Global, wants to get rid of them. It’s unclear whether any of the other big publishers will be allowed in and make a takeover bid. Those inside Fear of acquisition Private equitywrites The New York Times. This leads to cutbacks and layoffs. A verdict is expected in November.