The American Booksellers Association wrote a letter—signed by me, since I was then Chairman of the Board—to Attorney General Janet Reno and Robert Pitofsky, then Chairman of the Federal Trade Commission, setting out our views on the proposed merger of Barnes & Noble and Ingram “a devastating development that threatens the viability of competition in the book industry and limits the variety and availability of books to consumers” and called for investigative action. After a report in The Times on June 1, 1999, which indicated that Federal Trade Commission officials would recommend the Commission to contest the proposed $600 million purchase, Barnes & Noble believed to have partially terminated its deal, to avoid the embarrassing rejection.
Interestingly, it wasn’t just associations of authors and booksellers who opposed the consolidation of Barnes & Noble and Ingram, but also a company that at the time had almost 60 percent of its order processing through Ingram: Amazon, would continue to grow and maintain its capability to negotiate. Fifteen years later, in 2014, over 900 authors, including Stephen King, Anna Quindlen and John Grisham, signed a full-page ad in The Times urging Amazon to end its “selective retaliation” against authors whose publishers complied with the claims of Amazon had not backed down. Today, the American Booksellers Association continues to challenge Amazon’s anticompetitive behavior on behalf of indie stores and advocates for antitrust laws like the American Innovation and Choice Online Act. This bipartisan bill, passed by the Senate Judiciary Committee by a 16-6 vote in early 2022, creates rules for fair online competition by outlawing monopolistic behavior by major online platforms.
According to the Justice Department, Penguin Random House argued that the potential acquisition of Simon & Schuster “will provide a counterbalance to Amazon’s alleged purchasing power,” but the Justice Department countered that “internal documents tell a different story: Penguin Random House plans to embrace Amazon.” even tighter after the merger.”
Publishers are inevitably gatekeepers. They can only accept as many manuscripts or authors as they can afford to publish and sell. However, they are limited by their competition as only a limited number of books are allowed to be published and purchased. Today in the United States approximately 2.5 books are sold per person each year.
In today’s book retailing world, a customer may be left with a book that is less well made, less engaging, less diverse, more expensive, and whose author makes less money. No two books are the same you say? Yes, and every day I see buyers choosing one book over another. While Amazon has siphoned off an enormous chunk of the physical book market and nearly all of the e-book market, our customers continually thank Square Books for our physical presence and tell us it’s a better, more enjoyable way to shop. The language they use to express their preferences is money.
I hesitate to speak critically of Penguin Random House. After all, William Faulkner, which is almost entirely published by Random House, has long lived in Oxford, Mississippi — where I live — and Penguin Random House published my wife’s novel Summerlings, for heaven’s sake, so naturally our business does business with it . And it’s a whole lot of business. Penguin Random House, even without Simon & Schuster, accounts for more of our business than all of Square Books’ accounts combined.