[November 27, 2020] The news this week that Bertelsmann / Penguin Random House plans to acquire Simon & Schuster is a threat to Canadian literary culture and the Canadian book industry. On behalf of our membership—Canadian-owned and –operated literary publishers across the country—the LPG joins the Association of Canadian Publishers in calling on Heritage Minister Steven Guilbeault and the Government of Canada to ensure that the acquisition is of net benefit to Canada and the Canadian-controlled book sector, and that it meets Competition Act requirements.

The Canadian book market is already highly concentrated and tilted toward the biggest publishers and retailers. With this acquisition, the domestic market would be utterly dominated by foreign-owned conglomerates, whose profits are sent out of the country. The business practices of algorithm-driven Internet giants such as Amazon have long challenged the survival of Canadian bookstores, distributors and publishers.

When faced with such enormous scale and market power as the combined publishing houses (Penguin Random House Canada and Simon & Schuster Canada) would wield, small literary presses would be disadvantaged in every way: competing for authors, staff, sales and distribution services, retail shelf space, reasonable shipping rates, and media attention.

“Canadian literary publishers operate across the entire country, in communities large and small, reflecting the specific realities of those locales to a much larger audience. We are an integral part of the structure that allows those stories to be told,” said Karen Haughian, Chair of the Literary Press Group. “Small presses are the lifeblood of Canadian book culture. We discover new, exciting voices and invest in them, helping Canadian authors to find readers and tell their stories, at home and abroad.”

Longstanding Canadian cultural policy provides a framework to review proposed foreign investments. The Revised Foreign Investment Policy in Book Publishing and Distribution sets out the requirement to review indirect acquisitions (which result from foreign acquisitions) on the Canadian market. Moreover, one of the purposes of the Competition Act is to “ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy”.

“With the acquisition of Simon & Schuster—and its Canadian subsidiary—the situation is further exacerbated. Without fair rules, Canadian companies can’t compete, and we are in danger of having our stories silenced,” Haughian added. “The government must do everything in its power to protect independent Canadian publishers and preserve cultural and economic space for Canadian literature.” 

Contact: Laura Rock Gaughan, Executive Director, laurag@lpg.ca