The news that the world’s two largest publishers, Random House and Penguin, are in talks about a merger should not have come as a surprise. It’s been rumored for months now — I even mentioned it in an interview with Rachel Deahl of Publishers Weekly last week.

But when Deahl followed up on that with a report yesterday in which the talks were formally acknowledged by Penguin, well, shock and dismay — not to mention a degree of horror — were expressed all ’round.

As Deahl and co-reporter Jim Milliot note in the PW piece, booksellers freaked:

“I always worry about too much consolidation in any industry. And since Random House and Penguin together are 30% of our sales, that is cause for concern,” said Roxanne Coady, owner of R.J. Julia in Madison, Conn. “When I was an accountant, it was always a worry if any one person was 15% of your sales, because it tips the scales of the relationship. … Random House is already the gorilla going through my checkbook. Together they would be the elephant.”

Agents freaked, too — as one brave but, er, anonymous agent tells PW (and will somebody please tell me what is so bloody risky about taking responsibility for your words and going on the record here?): “‘Fewer publishers to submit to, lower advances.’ This agent noted that a merger could mean more opportunities for independent publishers to step forward, but added, ‘It’s hard to feel positive about that.'” Agent (and former bookseller) Andy Ross writes in the comments section of the piece that “This is unimaginably bad news.”

And no doubt about it, it is. As a New York Times report noted,

The merger, if completed, would create a combined entity that would control nearly 25 percent of the United States book market and feature an elite roster of authors like Dan Brown, Toni Morrison and John Grisham of Random House and Junot Diaz and Patricia Cornwell of Penguin.

Well, who cares about those writers in particular, but that’s still not a pretty picture for even the likes of little indies like Melville House, no matter what brave anonymous agents say. Still bigger, not to mention fewer, dominant players means an even less friendly marketplace for diversity — or, even more strikingly, a less friendly marketplace for simple old-fashioned books with their tiny margins of profit.

And precisely how big would the resultant behemoth be? As a Wall Street Journal report by Jeffrey Trachtenberg details,

Under the deal being discussed, the new company would operate as a joint venture, with Bertelsmann holding slightly more than half the shares, according to those familiar with the situation. That reflects Random House’s bigger size: its sales last year were $2.26 billion compared with Penguin’s $1.6 billion.

Penguin is likely to be valued at $1 billion or slightly more, with Random House worth somewhat more than that, say people briefed on the discussions, so the venture would likely have an equity value of somewhere between $2 billion and $3 billion.

Trachtenberg also notes that, “A person briefed on the discussions said the talks were advanced and could result in a deal in the next few weeks.”

As I say, this should be no surprise. A Financial Times report notes, “Analysts have predicted consolidation among the ‘big six’ of the relatively fragmented sector, citing shifts in the balance of power in an industry where independent bookstores are giving way to national chains and large technology companies control ebook stores.”

So delicately put. What the FT comment only hints at is what no one is saying: This bit of bad news for art, intellectual culture and free speech is all courtesy of the Department of Justice. That’s right, it’s your tax dollars at work. The government has thrown its support behind a monopoly, and so businesses run by the bottom line, as the Big Six publishers are, have little choice: Merge and grow huger or die. As the Times report puts it most succinctly, although not succinctly enough, this is all about “Lower prices offered by retailers like Amazon …”

God knows who else the Times think is offering low prices “like” Amazon. In fact, no one is, because the kind of “loss-leader” pricing Amazon practices is illegal and no one else has had the nerve, nor the governmental support, to get away with it.

Thus, it’s purely a business decision for bottom-line publishers like Random House and Penguin: If they want to survive, they have no choice — even in the face of further persecution from the government on anti-monopoly charges. As one analyst tells the Times, “They’re facing a much bigger threat in Amazon than considering it might restrain competition.”

That is, even with a government backing them, it will be hard for Amazon to dictate terms to a company so huge as Random Penguins (or will it be Penguin House?). And it will be hard for the government to charge the resultant company with collusion. After all, you can’t collude with yourself.

The question is will that matter to the rest of us? As the marketplace becomes even more completely dominated by companies that are not trying to provide consumers with what they want, but rather are more perfectly focused on their bottom line to the exclusion of all else, will those of us publishing — or selling, or writing, or reading — books guided by another imperative, have anyplace left to go?