Thursday, September 29 2022

Victor Hugo once wrote: “The mind that does not read dries up like the body that does not eat.”

In the country that gave birth to the author of Wretched, such a sentiment has meant that literature is not meant to be a vulgar trade like any other but rather an art form to be protected. So the impending acquisition of France’s biggest publisher Hachette by billionaire raider Vincent Bolloré has the local literary world on edge.

Bolloré’s media group, Vivendi, is in the midst of a takeover bid to buy out the 55 percent of Lagardère, which owns Hachette, which it does not already own. If finalized, the deal would make Vivendi the third-largest publisher after Bertelsmann’s Penguin Random House and News Corp-owned HarperCollins, and would be a key step in Bolloré’s rebuilding of the group after selling off most of its largest company Universal Music Group last year.

Antitrust regulators in Brussels will have the final say as they are currently reviewing the deal. But it is already clear that book publishing in France poses the biggest potential competition problem because Vivendi already owns the second player Editis and Hachette is number one.

Competitors have already sounded the alarm. Antoine Gallimard, the owner of France’s third-biggest publisher, said the deal was “unthinkable” and “damaging”. A union of booksellers compared the future group to a “financial and marketing bulldozer” which would prevent unknown or unconventional authors from reaching the market, reducing France’s “biblio-diversity”.

They’re right. If Vivendi were to swallow Hachette, the new group would hold around 70% of the French market for school books, and more than 50% of paperbacks and tourist books, according to economist Françoise Benhamou. Hachette and Editis together achieved about 1.5 billion euros in sales in France last year, which would make the new entity about two and a half times larger in terms of sales than the two main ones. following actors Madrigall (owner of Gallimard and Flammarion) and Media Participations (Seuil and La Martinière).

Regulators will likely demand a package of “remedies” to protect French booksellers and authors from harm if they approve the deal. This could include sales of assets in particular book categories or in areas such as distribution and logistics. Vivendi has publicly acknowledged the need for recourse.

However, there is another consternation in the literary world that may be more difficult to appease: Vincent Bolloré himself. Although the 70-year-old industrialist recently officially handed over the management of his business empire to his sons, he still keeps a close eye on Vivendi, which he has made into a dominant force in French media. The group owns television channels, radio stations, magazines and newspapers, an advertising agency and a television and film production branch.

Under the politically conservative Bolloré, the group hasn’t been shy about giving some of these outlets a right-wing slant. He turned the 24-hour news channel CNews into a raucous cousin of Fox News that launched the political career of far-right presidential candidate Eric Zemmour.

Would the book publishing business be affected by Bolloré’s policy? Antitrust regulators have little ability to influence such policy issues, but if the example of the United States is any indication, they pay close attention to potential distortions of competition in the sector. The US Department of Justice has sued to block another major merger, Penguin Random House’s proposed $2.2 billion acquisition of Viacom’s Simon & Schuster, on the grounds that it would lead to lower advances for authors, fewer books and less variety for consumers.

French bibliophiles already benefit from a much stricter regulatory framework than in the United States which has made it possible to insulate publishers and booksellers from the ravages of Amazon and changing consumer habits. In the 1980s, the government decided that books were not a product like any other and decreed a “one-size-fits-all” price for books which effectively prohibited discounts, and then extended the system to e-books. This left less of a hole for Amazon to exploit, so it only grabbed 10% of the total book market, compared to 40% in the United States. France also still has many independent booksellers.

In such an environment, it would be a brave regulator not to insist on protecting Victor Hugo’s beloved hobby if Vivendi de Bolloré bought Hachette.

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