Last week, the district court released its opinion in United States v. Bertelsmann, an antitrust case concerning a proposed merger between Penguin Random House (“PRH”) and Simon & Schuster (“S&S”), which the court blocked (an “amended opinion” was released earlier this week, but the two documents only differ in their concluding language). Authors Alliance has been covering this case on our blog for the past year, and we were eager to read Judge Pan’s full opinion now that redactions had been made and the opinion made public. This post gives an overview of the opinion; shares our thoughts about what Judge Pan got right, got wrong, and left out; and discusses what the case could mean for the vast majority of authors who are not represented in the discussion.

Background

The Department of Justice initiated this antitrust proceeding after PRH and S&S announced that they intended to merge, with Bertelsmann, PRH’s parent company, purchasing S&S from its parent company, Paramount Global. The trade publishing industry has long been dominated by a few large publishing houses which have merged and consolidated over time. Today, the trade industry is dominated by the “Big Five” publishers: PRH, S&S, HarperCollins, Hachette Book Group, and Macmillan. And a sub-section of the trade publishing industry, “anticipated top sellers,” is the focus of the government’s argument and Judge Pan’s opinion. This market segment is defined as books for which authors receive an advance of $250,000 or higher (a book advance is an up-front payment made to authors when they publish a book, and often the only money these authors receive for their works). 

The main thrust of Judge Pan’s opinion is simple: the proposed merger would have led to lower advances for authors of anticipated top sellers, and the market harm that would flow from the decreased competition in the industry is substantial enough that the merger can not go forward under U.S. antitrust law. To arrive at this conclusion, the court considered testimony from a variety of publishing industry insiders, experts in economics, and authors. 

Defining the Market

Trade publishing houses are those that distribute books on a national scale and sell them in non-specialized channels, like at general interest bookstores or on Amazon. It stands in contrast to self-publishing, academic publishing, and publishing with specialized boutique presses. But changes in how we read and how books are distributed has complicated these distinctions. For example, university presses are sometimes considered to be non-trade publishers, despite the fact that many also publish trade books. University presses are particularly well poised to publish books that bridge the gap between the scholarly and the popular—Harvard University Press’s publication of Thomas Picketty’s Capital in the 21st Century is one example, and it was an unexpected bestseller. Similarly, Amazon sells trade books alongside other types of books. The Authors Alliance Guide to Understanding Open Access is available as a print book on Amazon, but it is one we released under an open access license, and is far from a trade book. Consumers increasingly buy books online as brick and mortar bookstores across the country close or downsize, and the Amazon marketplace obscures the distinction between trade publishing and other types of publishing.

Within trade publishing, there is a small segment of books which are seen as “hot,” which the DOJ calls anticipated top sellers. While PRH argued that this distinction was pulled out of whole cloth, the popular “Publisher’s Marketplace,” a subscription-based service for those in the industry, uses certain terms (essentially code words) to indicate the size of the advance in a book deal when they are announced. “Deals under $50,000 are ‘nice,’ those up to $100,000 are ‘very nice,’ those up to $250,000 are ‘good,’ those up to $500,000 are ‘significant,’ and larger deals are ‘major.””

For the market for anticipated top sellers (trade books with advances of $250,000 or higher), the Big Five collectively control 91% of the market share. In contrast, for books where an author receives an advance under $250,000, the Big Five control just 55% of the market, with non-Big Five trade publishers publishing a significant portion of trade books in this category. Post-merger, the combined PRH and S&S were expected to have a 49% share of the market for anticipated bestsellers, according to expert testimony—more than the rest of the Big Five put together. For these reasons, the merger was determined to be improper as a matter of antitrust.

Beyond Anticipated Top Sellers

While Judge Pan’s opinion is measured, thoughtful, and reaches (from our perspective) the correct result, the broader context of the publishing industry shows how narrow the subset of authors in this market is, and how some authors were left out. The market the court considered in this case is “a submarket of the broader publishing market for all trade books.” In its pre-trial brief, PRH asserted that “[s]ome 57,000 to 64,00 books are published in the [U.S.] each year by one of more than 500 different publishing houses” and “another 10,000-20,000 are self published.” It is unclear whether the first number includes academic books and other non-trade titles. “[A]nticipated top-selling books” account for just 2% of “all books published by commercial publishers” (again, it is unclear what “commercial publishers” means in this context), and an even smaller share of all books published in the U.S. in a given year (a difficult statistic to pin down, but somewhere between 300,000 and 1,000,000 books per calendar year, depending on who you ask). 

It is not just that the authors that are the topic of this discussion are unique in the high advances they receive for their books, it is that the business of publishing a book is fundamentally different for these authors than less commercially successful authors. And this is what is missing from Judge Pan’s opinion: the economic system of Big Five book acquisitions for anticipated top sellers is totally unlike many authors’ experiences getting their work published. While many authors struggle to find a publisher willing to publish their book, and more still struggle to convince their publisher to do so on terms that are acceptable to them, anticipated top sellers are generally the subject of book auctions, whereby editors bid on the rights to a manuscript in an auction held by an author’s literary agent. It is important to keep in mind that for a vast majority of working authors, these auctions do not take place. 

The language in the opinion shows how it generalizes the experiences of commercially successful trade authors to authors more broadly, doing a disservice to the multitude of authors whose book deals do not look like the transactions it describes. Judge Pan states that “[a]uthors are generally represented by literary agents, who use their judgment and experience to find the best home for publishing a book.” Literary agents play an important role in the publishing ecosystem, and serve as intermediaries for some authors to help them develop their manuscripts and get the best deal possible. But the author-agent relationship is also a financial one: agents receive a “commission” of around 15% of all monies paid to the author. It stands to reason that an author who cares more about their work reaching a broad audience than receiving a large advance, or even an advance at all, is much less likely to be represented by an agent. And these authors too care about finding the right home for their work, getting a book deal with favorable terms, and feeling confident that their publisher is invested in their work. Making the publishing industry less diverse, with fewer houses overall, is just as detrimental to these authors as it is to top-selling ones. 

What is troubling about the decision is not that it focuses in on a certain type of author and certain type of book—the question of what the relevant “market” is in antitrust cases is a complicated one—but that the vision of authorship and publication it presents as typical does not reflect the lived experiences of most authors. The dominant narrative that “authors” are famous people who make a living from their writing, primarily through the high advances they receive from trade publishers, simply does not bear out in today’s information economy. 

Overall, the decision in this case is in many ways a boon for authors who care about a vibrant and diverse publishing ecosystem—whether they are authors of anticipated top sellers or authors who forgo compensation and publish open access. When publishing houses consolidate, fewer books are published, and fewer authors can publish with these publishers. This could lead less commercially successful trade authors to turn to other publishers (whether small trade publishers, university presses, or boutique publishers), who would then be forced to take on fewer books by less commercially successful authors. Self-publishing is an option for authors no longer able to find publishers willing to take their work on, but self-published authors earned 58% less than traditionally published authors as of 2017, and this decrease could lead some authors to abandon their writing projects altogether. These downstream effects may be speculative, but they deserve attention: this is almost certainly not the last we will hear about anticompetitive behavior in the publishing industry, and the effects of this behavior on non-top selling authors also matter. We hope that future judges considering these thorny questions will remember that authors are not a monolith, yet all are affected by drastic changes to the publishing ecosystem. 

On Monday, Judge Florence Pan issued an order enjoining (or blocking) the proposed merger of Penguin Random House and Simon & Schuster following a weeks-long trial in the D.C. Circuit. Authors Alliance has been monitoring the case and covering it on this blog for the past year. While Judge Pan’s full opinion is not yet public—it is currently sealed while each party determines what information it would like to be redacted as confidential—but her decision to block the proposed merger strikes a blow for efforts to consolidate major trade publishers and signals judicial concern about too little competition in the publishing industry. 

Judge Pan (who was appointed to the D.C. Circuit Court of Appeals to replace then-judge Kentanji Brown Jackson in September, but has continued to preside over this district court case), issued a short order announcing the decision. Judge Pan found that the Department of Justice had “shown that ‘the effect of [the proposed merger] may be substantially to lessen competition’ in the market for the U.S. publishing rights to anticipated top-selling books.” She concluded that the merger could not move forward under U.S. antitrust law, which seeks to protect market competition and ensure that no one firm wields too much power. 

The DOJ applauded the decision, with Assistant Attorney General Jonathan Kanter stating that the decision “protects vital competition for books and is a victory for authors, readers, and the free exchange of ideas,” and that the merger would have “reduced competition [and] decreased author income.” Penguin Random House, on the other hand, has already signaled that it is considering appealing the decision, and initially indicated it would be filing an “expedited appeal” before walking back this position in later comments. Jonathan Karp, president and CEO of Simon & Schuster, released a statement to the firm’s employees indicating Penguin Random House’s plans to appeal and stating that Simon & Schuster would be reviewing the decision and conferring with Penguin Random House to determine “next steps.” 

The parties have until November 4th to propose redactions to her opinion, which Judge Pan will then decide on, before the court releases it to the public. There is no set timeline for the full decision being released, but the short timeline for the parties to request redactions could signal that the process will not take long. 

One interesting aspect of the case is that the government focused on the market for “anticipated bestsellers” in its filings and argument, as well as the effect that lessened competition would have on authors, not the general public. Judge Pan adopted this position in her order, apparently accepting the argument as valid. Typically, antitrust focuses on harm to consumers, and indeed, Penguin Random House argued staunchly that the lack of a tangible harm to consumers meant the proposed merger did not pose an antitrust problem.

But were the merger to go forward, with fewer firms bidding on books expected to be commercially successful, the authors of those books could receive lower advances or less favorable contract terms due to the lessened competition. While the government chose to focus on a narrow segment of the book market (a move which faced criticism by some), the point that publishing house consolidation can hurt authors’ interests by giving them fewer choices is an important one.

Authors Alliance cares deeply about ensuring that our publishing ecosystem is diverse and vibrant, and the merger could have had deleterious effects on this diversity. At the same time, the focus on the anticipated bestseller market demonstrates one pitfall of the publishing industry: authors of commercial bestsellers tend to be centered as the authors whose interests are most important or worthy of attention, but these represent a vanishingly small percentage of working authors. Many of Authors Alliance’s members are authors who do not publish with trade publishers like Penguin Random House and S&S, and these authors have different motivations and priorities than authors of anticipated bestsellers. It is important that the government consider a variety of different types of authors as they work to shape author-friendly laws and policies, and we look forward to engaging with policy makers to help raise awareness of this important issue. 

Privacy may not seem like an important issue for authors who write to be read: after all, our members are often motivated by a desire to share their creations broadly. But writing in the digital world increasingly presents us with new considerations in the realm of personal and digital privacy. This post surveys an important privacy-related issue for authors: the right to speak or write anonymously, and will be the first in a new series on privacy considerations for public-minded authors. 

Why Publish Anonymously?

The tradition of authors publishing anonymously, or under a pseudonym, stretches back centuries. Authors choose to publish works of authorship under pseudonyms or anonymously for a variety of reasons. Authors affiliated with academic institutions may prefer to publish their work under a different name in order to keep their academic and authorial identities separate. Some authors publish under both their real names and pseudonyms to explore new styles or genres of writing. Authors writing about controversial topics may also choose to use pseudonyms or publish anonymously in order to maintain personal privacy while contributing to our understanding of such topics. Pseudonyms also allow authors to write works jointly under a single name.

Historical Pseudonyms 

Notable pseudonyms from the past show the breadth of motivations authors might have for pursuing this path, as well as the advantages of using pseudonyms. For example, in the mid-1800s, the Brontë sisters (Anne, Charlotte, and Emily) began publishing under the names Acton, Currer, and Ellis Bell to conceal the fact that they were women. After being rejected from multiple literary publications due to gender biases of the time, writing under male pen names gave the Brontës a path forward to share their creations with the world. Jane Eyre and Wuthering Heights have had a deep and profound impact on our literary tradition, and the Brontës’ ability to publish pseudonymously is what made this possible.

The 19th century writer Mary Ann Evans (better known by her pen name, George Eliot), on the other hand, elected to use a male pen name in order to disassociate herself from preconceived notions about female authors. She was also motivated by a desire to keep her previous work as a translator, critic, and editor—which did bear her real name—separate from her identity as a fiction author. Other authors from the past, such as C.S. Lewis and the famed contemporary Italian novelist Elena Ferrante, have used pen names in order to maintain their personal privacy and avoid public scrutiny while still engaging with the literary world. 

Pseudonyms can also allow multiple authors to work together under a single author name, to better appeal to readers or to accommodate publishing conventions. The idea for the Nancy Drew books, for example, originated with Edward Stratemeyer, who also created the Hardy Boys series. Stratemeyer generated ideas for childrens’ novels and then hired ghostwriters to execute his vision. The series’ “author,” Carolyn Keene, never existed. Instead, her name stands in for the slew of ghostwriters who wrote the novels over time. By using a single author name for these books, Stratemeyer (and later, his estate) was able to create a sense of continuity and build reputational capital for the fictional Keene, captivating multiple generations of young readers.

Anonymous Works

Rather than use a pseudonym, some authors choose to publish their works anonymously, so that no author at all is listed on or associated with the work. Like using a pseudonym, publishing anonymously divorces the author’s real identity from the work. But unlike using a pseudonym, an anonymous work conspicuously lacks an author at all. Throughout history, politically or socially controversial works have been published anonymously. Mary Shelley’s Frankenstein was originally published anonymously, and some have speculated that this was due in part to her fear of losing custody of her children were she to be associated with the monstrous tale. More recently, Go Ask Alice, a book about a 15-year old girl’s descent into drug addiction, was published anonymously. The work presented itself as a diary, and the anonymous author led to debate about the work’s veracity. While the book is now considered to be fictional, the anonymous authorship created an implication that the work was somehow a “real” diary, which colored the reading experience for contemporaneous audiences.

Pseudonyms, Anonymity and Copyright

The U.S. Copyright system accommodates authors’ rights to publish pseudonymously in a number of different ways, underscoring the importance of this right as a matter of public policy. First, and most importantly, the Copyright Act provides an avenue for an author to register their work under a pseudonym (longtime readers may recall that copyright registration is not necessary in order for a work to be protected by copyright, but can provide significant benefits in many circumstances). An author can use both their pseudonym and their legal name on their copyright registration, or their pseudonym only. If an author does use their legal name on their copyright registration for a pseudonymously published work, it is important to understand from a privacy perspective that the author’s legal name will become a part of the public record, as copyright registrations are publicly available. If an author registers their copyright under a pseudonym and does not use their legal name in the registration, their legal name will not be made public.

However, there is a trade off for authors who register copyrights under a pseudonym. The duration of copyright protection is different for pseudonymously authored works: rather than being the life of the author plus 70 years, the copyright term for pseudonymous works is 95 years from the date of creation. This is because, without a real person’s identity to associate with the copyright, it is impossible to measure the life of the author. Additionally, a pseudonym itself cannot be copyrighted, as names and short phrases are outside the scope of copyright protection (though in some instances, words or marks identifying the author could be protected in other ways, such as by trademark law). This means that it is possible for multiple authors to use the same pseudonym, which can create confusion for readers and be a detriment to those authors’ ability to reach them. 

Authors are also empowered by the copyright system to register copyrights anonymously. As with pseudonymous works, anonymous works are subject to copyright protection for 95 years from the date of creation, since the life of the author cannot be ascertained without an author being named. Even if a work is registered anonymously, its author can sue to enforce the copyright (though they will likely lose their anonymity in the process). Anonymous works pose challenges for secondary users, however, because it leaves creators who may want to use the anonymous works in their own works without a point of contact.

Authors Alliance is pleased to announce that we have joined with several civil society and library organizations (EFF, CCIA, ALA, ARL, OTW and ACRL) on an amicus brief submitted to the Ninth Circuit Court of Appeals in Hunley v. Instagram, a case about whether individuals and organizations that merely link to content can be liable for secondary copyright infringement, a judicial doctrine which places liability on a party that knowingly contributes to or facilitates copyright infringement, but does not itself directly infringe a copyright. More specifically, the case asks whether Instagram can be secondarily liable for copyright infringement when users use its “embedding” feature, whereby websites and platforms can employ code to display an Instagram post within their own content. 

The Case

The case arose when a group of photographers, who had captured images related to the death of George Floyd and the 2016 election, became upset that their images were being used in a variety of media outlets without permission. The outlets had used Instagram’s embedding tool to link and post the images rather than copying the images directly. The photographers then sued Instagram in the Northern District of California, on the theory that by offering the “embedding” feature, it was facilitating copyright infringement of others and therefore liable.

The district court dismissed the photographers’ claim because it did not pass muster under an inquiry known as the “server test,” established in the seminal Ninth Circuit case, Perfect 10 v. Amazon. The server test is premised on the idea that a website or platform does not violate the copyright holder’s exclusive right to display their work when a copy of the work is not stored on that website or platform’s servers. In short, the inquiry asks whether the work was stored on a website’s server, in which case the website could be liable for infringement, or whether that website merely links elsewhere without storing a copy of the work, in which case it cannot. When media outlets in this case embedded Instagram posts into their content, they did so using code that embeds and displays the post, but the posts were not actually stored on the outlets’ servers. Therefore, the district court found that Instagram was not liable for secondary infringement under the server test.  

The photographers have appealed to the Ninth Circuit Court of Appeals to challenge the validity of the server test for embedded content. It is worth noting that district courts in other circuits have disapproved of the Ninth Circuit’s Perfect 10 server test and found that embedding can constitute secondary infringement in some cases, and it is not applied in all jurisdictions. For this reason, some have speculated that the Ninth Circuit’s server test is ripe for revisiting. 

The Brief

Our amicus brief asks the Ninth Circuit to affirm the district court’s dismissal of the photographers’ complaint and the continued viability of the server test. It argues that the Perfect 10 server test should not be discarded, as it has paved the way for an internet that depends on the use of hyperlinks to connect information and present it efficiently. The brief explains how linking works, why linking is important, and the negative consequences for a wide variety of internet users—including authors—that could occur if the court narrows or rejects the server test. 

First, our brief explains how embedding and linking work: when an article or website links to other content, it accomplishes this by using computer code to incorporate another’s content into the work and/or direct users to it. Our brief argues that linking, and particularly the act of inline linking (providing links within the text of a website or blog post itself, as we have done throughout this post) is fundamental to the internet as we know it. Online advertising, message boards, and social media platforms depend on the ability to connect sources of information and direct users elsewhere online. 

Second, our brief argues that abandoning or narrowing the Perfect 10 server test could introduce liability for inline linking. Like embedding social media posts, inline linking to other content incorporates materials created by others indirectly without the secondary user actually hosting that content on a server. In this way, inline linking allows internet users to efficiently verify information or learn more about a given topic in just a click. Inline linking is in this way analogous to embedding, meaning that a decision in favor of secondary liability in this case could threaten the legality of inline linking, potentially disrupting the very fabric of the internet as we know it.

Like the general internet-using public, authors also depend on their ability to link to other sources in their online writings to cite to other sources and engage with other works of authorship. In fact, this is why we decided to weigh in on this case: a decision that introduces liability for inline linking could drastically alter how authors can cite to other sources of information and how they can conduct research in a digital environment. Authors rely on inline linking to save space and preserve the readability of their works while citing sources and engaging with other works. Authors also depend on online linking to perform research, as it can quickly and easily direct them to new sources of information. As more and more works are born digital, an author’s ability to link to other content to enrich their scholarship has become more important than ever. It is crucial that this ability is protected in order for the internet to continue to be an engine of learning and the advancement of knowledge. 

So far, the parties have submitted their opening briefs in this case, and several other amicus briefs have been filed. Oral argument has not yet been scheduled. Authors Alliance will keep our readers informed about updates in this case as it moves forward. 

Last month, publisher John Wiley & Sons made headlines when it made the controversial decision to abruptly remove over 1,300 ebooks from academic library collections. It did so by removing these titles from ProQuest Academic Complete, a large collection of ebooks that many libraries subscribe to. Earlier this week, Wiley made headlines again when it announced it was temporarily restoring access in the face of public pressure. 

As has unfortunately been typical with other changes in how publishers work (or refuse to work) with libraries, authors of these books were left in the dark, with little say on the decision. We have heard from many authors who believe, as we do, that libraries play an extraordinarily important role in preserving and providing access to the materials we write, in all formats, and we believe they should be able to purchase access on reasonable terms so they can fulfill their missions.  We’re writing this post to highlight the Wiley situation and outline some ways that authors can make their voices heard. 

The Wiley Ebook Situation

Wiley’s move was particularly shocking since the removal of access coincided with the beginning of the academic term. Countless students who were relying on library access to textbooks they needed for their academic courses lost this access exactly when these texts were most needed. It is increasingly common for publishers of academic texts like these to refuse to sell electronic copies to libraries at all, which seems to be the tactic Wiley was pursuing here, leaving these students with no low cost alternative (and in fact, Wiley reportedly refuses to sell textbooks to libraries at all, in either digital or print format). This left instructors scrambling to find new texts to assign, redesign syllabi, and otherwise adopt their courses to a loss of access to the Wiley texts, at a moment when their attention should have been focused on teaching and welcoming students. 

Unsurprisingly, the decision was widely condemned by librarians, civil society organizations, and university libraries. #ebookSOS, which  has been working to highlight these kinds of challenges for several years, organized several efforts in protest. 

Authors Alliance began working with #ebookSOS to raise awareness of this issue among authors whose works were removed from library collections in an effort to encourage Wiley to reverse its decision and provide assurances that it will not take measures like these in the future. The authors we’ve heard from want their books to be read, to serve learning, and to be used to share knowledge with the world. Some of these authors view Wiley’s decision as a betrayal, and indeed, it is hard to square with Wiley’s asserted commitment to “​​[e]nabling discovery by supporting access to knowledge and fueling the engines of research.”

Earlier this week, Wiley relented. It announced that it had decided to temporarily reverse course, restoring access to the removed texts until June 2023, when they will once again be removed. Wiley apologized for the “disruption” the move caused to students, libraries, and instructors, admitting that it caught them off guard. But while this may ease the burden on instructors and students for now, librarians have resoundingly found the measure to be insufficient. Temporarily restoring access to these particular texts does not solve the fundamental problem that large publishers like Wiley can—and do—unilaterally and without warning remove books from digital library shelves, even if their motive is purely to increase their own profits. We’ve continued to hear from authors who have strong reservations both about Wiley’s decision and how it went about making it. If you are an author published by Wiley and have thoughts about its decision to remove access to these ebooks, we would love to hear from you:  Please write to us at info@authorsalliance.org. 

What Authors Can Do

Unfortunately, this is not the first time that a publisher has acted unilaterally to make its ebooks less accessible to the detriment of readers and authors. Trade publisher MacMillan at one point announced it would employ a two-week embargo before libraries could acquire newly published titles as ebooks. Similarly, rising ebook prices during the pandemic hurt many students who relied on these works to learn. Yet, as Wiley’s response to the outcry following its announcement shows, a concerted campaign to pressure these publishers can have results. For example, MacMillan ultimately abandoned its plans for an ebook embargo following a boycott of all its ebook titles by various library systems. 

Most authors have little say in how publishers distribute their works. Publishing contracts typically give publishers broad discretion to determine when, how, and on what terms authors’ books are sold. While it is understandable that authors will not be involved in every decision about distribution, authors have placed trust in publishers that they will make reasonable decisions. So, what can authors do? 

First, as the Wiley ebook situation has shown, authors’ voices do matter. If you have concerns about your book being available to libraries, speak out! One reason that Authors Alliance exists is to help amplify your voice and help publishers understand your views on how their legal and policy decisions affect your interests in making your books available to the world.  If you’re wondering about how we might help, please get in touch—we’d love to hear from you. Second, authors do have an opportunity to influence how their books are shared when negotiating their publishing contracts. There are no guarantees that a publisher will accept your proposed contract language (and we suspect most will be resistant). But given that several publishers have recently demonstrated their unwillingness to make reasonable distribution decisions, it seems to us equally reasonable to ask for contractual assurances that they will continue to sell your book to libraries on reasonable terms, in all formats. For some language to serve as a starting point, #ebooksos has shared their model contract language for authors, here.