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. 

Today, Authors Alliance joined 20 public interest, civil society, and other like-minded organizations in signing on to a letter opposing the latest iteration of the Journalism Competition and Preservation Act (“JCPA”). The full text of the letter can be found here. Last year, Authors Alliance signed on to an earlier letter voicing opposition to the JCPA when it was initially proposed. A new version of the bill was recently released in the Senate, prompting the bill’s opponents to reiterate our concerns. 

In brief, the JCPA would enable collective bargaining by news organizations with large online platforms by creating a “safe harbor” from antitrust law to allow media organizations to band together and negotiate with these platforms. This blog post will explain our concerns about the bill and provide an update on how the legislation has evolved in the months since it was first proposed. 

Problems with the JCPA

Touted as bipartisan legislation intended to protect journalism from unfair encroachment by large tech companies, the legislation has received support from groups such as the Authors Guild and some news publications. But civil society organizations have drawn attention to serious problems with the legislation for those who care about robust fair use rights and access to knowledge. 

The JCPA would force platforms to negotiate with news publications for “access” to their content to engage in basic activities such as linking to the news publication’s website. By creating what some have dubbed a “link tax,” the JCPA could lead organizations and individuals to link less to other sources out of fear of copyright liability, creating a chilling effect on online speech and making knowledge less accessible. The JCPA could also expand the scope of copyright by covering the aggregation of snippets or headlines from press publications—information that is in many cases not entitled to copyright protection. The JCPA may also work to entrench the largest press publishers while disadvantaging smaller publishers, who lack the sophistication or resources to participate in this collective bargaining. 

Changes to Legislative Language

The latest revised bill represents the third round of revisions to the JCPA (Public Knowledge has published comprehensive discussions of the first and second rounds of revisions in recent months for readers interested in learning more). Unfortunately, the latest changes to the JCPA does little to address the concerns voiced by Authors Alliance and our co-signatories last year. 

There is some evidence that the bill’s sponsors heard the concerns voiced by Authors Alliance and others, but the changes do not go nearly far enough towards ameliorating our concerns. For example, the latest version of the bill includes a provision stating that it does modify, expand, or alter the rights guaranteed under copyright. But the legislation could also cover activities that are considered to be fair uses (such as aggregating “snippets” from articles and linking), creating uncertainty as to how the fair use doctrine interacts with this proposed legislation. 

The revised bill also includes an “employee cap” which would bar news organizations with over 1,500 employees from participating in the anticipated collective bargaining to help address concerns about entrenching the largest players. But this would exclude just three of the country’s largest news publications, making it ineffective at addressing monopoly concerns. As today’s letter points out, the legislation as currently envisioned could “cement and stimulate consolidation in the industry and create new barriers to entry for new and innovative models of truly independent, local journalism.”  To make matters worse, the JCPA does nothing to ensure that arbitration that any gains to news organizations will actually go to the journalists actually writing the articles. The legislation establishes “collective bargaining” rights for publications, many of which do not allow their employees to collectively bargain. By prioritizing publications over the authors who make these publications possible, the bill does little to address the difficulties faced by journalists and other authors. 

Finally, other changes in the legislation create new problems. New language in the bill would force  platforms to carry content of digital journalism organizations that participate in collective negotiations, which could lead to platforms being required to aggregate content containing extreme views or misinformation. This raises serious free expression concerns.

Authors Alliance cares deeply about a vibrant and diverse publishing ecosystem where smaller publishers are not disadvantaged, and the legislation as envisioned would do just the opposite.

In November 2021, Authors Alliance published a blog post about antitrust and the publishing industry, focusing on a recent antitrust investigation intended to block the merger of two of the largest publishers in the country: Penguin Random House (“PRH”) and Simon & Schuster. The case is currently the subject of antitrust proceedings, with the Department of Justice (“DOJ”) on one side, and PRH, who is the party that would be purchasing Simon & Schuster, on the other. On August 1st, 2022, this case is scheduled for oral argument in the District Court for the D.C. circuit before Judge Florence Pan. In today’s post, we will provide an update on the case and share some thoughts about what it might mean for authors.

Witness Lists

Last week, the lists of witnesses for each side were announced. Both PRH and the DOJ included many prominent authors and publishing industry professionals on their witness lists. Literary agents and publishers will testify for both sides. Perhaps surprisingly, each party’s witness list also includes well-known authors. Bestselling author Stephen King will testify on behalf of the government, for example, whereas Andrew Solomon will testify on behalf of Penguin Random House. Penguin Random House also plans to call an economist to testify, likely as to potential economic effects of the merger. 

Parties’ Final Briefs

Then, earlier this week, both PRH and the DOJ submitted their final briefs in the case before it proceeds to oral argument. In its brief, the DOJ argues that a merger between PRH and S&S would violate antitrust laws based on the huge market share of bestsellers that the new firm would have, which it estimates will be nearly 50%. The DOJ also postulates that this would result in lower advances for authors, as there would be fewer publishers to “bid” on anticipated bestsellers, and ultimately, that the merger would lessen creative output and mean fewer authors could make a living from their writing. 

The DOJ’s brief also contextualized the merger within the longstanding pattern of publishing houses merging and consolidating, arguing that the industry as a whole is an “oligopoly” dominated by five major publishers, which cumulatively control 90% of the market for anticipated bestsellers (aside from Simon & Schuster and Penguin Random House, Hachette Book Group, Macmillan, and HarperCollins make up the rest of the so-called “Big Five”). Smaller publishers, which lack the resources of these major players, are generally unable to compete with the Big Five when it comes to anticipated bestsellers, as they often cannot offer the large advances bestselling authors come to expect. The DOJ concludes that because the planned merger would substantially lessen competition in the anticipated bestsellers market, it is presumptively illegal, a presumption which it states cannot be overcome by PRH’s arguments. The DOJ’s argument is also notable because it focuses on the harm to authors, not consumers. By including diminished creative output in the negative effects that might result from the merger, the DOJ’s brief signals that incentivizing authorship and supporting authors are important interests to be weighed when considering reorganization within the publishing ecosystem. 

PRH, for its part, argues that the relevant “market” in the case should not be the market for anticipated bestselling books, but market for books published overall. It further alleges that the “anticipated bestsellers” market (which the DOJ defines as books with advanances over $250,000) the DOJ discusses in its filings has no basis in industry classifications, and would only include approximately 85 books out of the more than 55,000 books published each year. PRH also challenges the government’s “presumption” of illegality, arguing that its prediction model is not adequate to show a likelihood of competitive harm. PRH argues that the merger would actually enhance competition by enabling the new firm to offer more attractive offers and incentivizing other large publishers to do the same in order to compete. It also states that the DOJ government misunderstands the publishing industry and book auctions, and that the DOJ’s predictions about competition within the publishing industry rest on false assumptions. For example, the brief explains that there is substantial uncertainty about how well a book will perform once it is published, making book auctions highly subjective and meaning that no “market price” can be set for book advances. Additionally, because authors have other priorities aside from maximizing financial gain, such as establishing strong relationships with their editors and ensuring that the publisher is a good fit for their work, it is not unheard of for authors to accept a bid that is not the highest offered due to these other factors. 

Overall, the parties’ final briefs in this case show that the book publishing industry is one beset by unusual characteristics and conditions: the offer and auction processes are not straightforward, sales predictions are unreliable, and the role of literary agents in book sales can obfuscate things further. And while publishing houses have steadily consolidated over time, antitrust efforts to make the industry less of an “oligopoly” have so far not been successful. 

As a general matter,  Author Alliance believes that more competition among publishers, and less consolidation of market power, will benefit authors. The trend that the DOJ observes about consolidation is true across the industry, including tradebook publishers but also academic publishers, textbook publishers and others, and substantially and negatively impacts all types of authors. It’s also true that more competition across the publishing ecosystem is needed, as shown by the pending ebook pricing fixing lawsuit against the Big Five publishers and Amazon. 

What’s Next?

Multiple sealed documents have been filed in the case, which makes it difficult to say with certainty what next steps are already in the works. Reports are that after initial oral arguments, trial will begin and is expected to last three weeks. The court has set a post-trial briefing schedule, suggesting that the upcoming hearing will not be the end of the story in this case. Authors Alliance will keep our readers informed about any updates as this antitrust case moves forward.

Yesterday, the Association of American Publishers (“AAP”) announced it had filed a lawsuit in federal district court against the state of Maryland seeking to block the state’s new e-book lending law from taking effect on January 1st, 2022. This year, Maryland was the first of several states to pass a bill requiring publishers to license e-books to libraries on “reasonable terms,” and is the only state in which such a law is set to go into effect. Authors Alliance has written about this type of state legislation in the past, and we have been following these developments closely throughout the year.

State E-Book Lending Legislation

In 2021, multiple states proposed—and in some cases, passed—state legislation requiring publishers to license e-books to libraries on reasonable terms. The legislation responds in part to publishers’ trend in recent years of charging libraries higher prices for e-book licenses than they do consumers: in some cases, libraries must pay up to five times as much as an individual consumer for an e-book license. Moreover, these licenses often come with restrictive terms, such as limits on the number of times an e-book can be checked out before the license is terminated. The issue gained particular salience during the COVID-19 pandemic, as libraries across the country shuttered in-person operations, and patrons were forced to turn to e-books and other digital services in order to access library resources.

The Maryland Legislation

In March of this year, the Maryland state legislature unanimously passed the Maryland library e-book lending bill. Before the bill could become law, it faced last-minute opposition by the AAP, which claimed the bill was unconstitutional. Nevertheless, Governor Larry Hogan announced that the bill had become law in May, and would go into effect in January of next year. Described by its proponents as “fairly mild,” the Maryland legislation requires “a publisher who offers to license an electronic literary product to the public to also offer to license the product to public libraries in the State on reasonable terms that would enable public libraries to provide library users with access to the electronic literary product.” “Reasonable terms” are not explicitly defined in the statute, leaving Maryland libraries and publishers to negotiate these terms.

Constitutionality of State E-Book Lending Legislation

Following the Maryland law’s passage, the AAP maintained that it viewed the legislation as unconstitutional, arguing that the legislation interferes with the federal copyright scheme and is thus “preempted” by federal law. Then, in August, the Copyright Office weighed in on the matter in response to a letter from Senator Thom Tillis expressing concerns about these legislative efforts. The Office stated that, in its view, the legislation was likely preempted by the federal copyright scheme under a legal theory known as “conflict preemption,” which applies when a state law and federal law conflict such that it is not possible to comply with both. However, it is important to note that determining the constitutionality of a particular state law is the providence of the courts, not Congress (of which the Copyright Office is a part), so this opinion is merely an advisory one. Moreover, the Office noted that the specific legal question at issue has not been addressed by any U.S. court, creating additional uncertainty about whether the laws might be preempted.

The AAP’s Lawsuit

In its complaint, the AAP reiterates its position that Congress, and not state legislatures, has the power to create laws governing copyright and uses of copyrighted works, calling the Maryland legislation “a frontal attack on these federal rights.” It also argues that “the vitality of the publishing industry” depends on publishers’ ability to make business decisions—including whether to license their e-books to libraries and on what terms. The AAP also sent a letter to New York governor, Kathy Hochul, urging her to veto the New York analogue to the Maryland law on similar grounds. Overall, the AAP takes the position that it is possible for state governments to support libraries without this type of legislation. Yet the fact remains that libraries have consistently had difficulties meeting their patrons’ needs with regards to digital lending: until last year, one of the major publishers even had an embargo in place, preventing libraries from obtaining many copies of new books. Without legislation addressing the issue—such as the Maryland law now under attack—there is no guarantee that publishers will offer libraries e-book licenses on terms they can afford and which meet the changing needs of patrons.