Google Book Deal Reviewed by U.S. Justice Dept.

Industry observers see possible antitrust issues with Google's recent proposed settlement with the Authors Guild and the Association of American Publishers.
Posted April 29, 2009
By

- Reuters



WASHINGTON (Reuters) - The U.S. Justice Department is making inquiries about a class action deal that Google Inc struck giving it the right to digitize and sell entire libraries, two experts on digitization told Reuters on Tuesday.

Under a proposed settlement last October between Google and the Authors Guild and the Association of American Publishers, Google agreed to pay $125 million to create a Book Rights Registry, where authors and publishers can register works and receive compensation from institutional subscriptions or book sales.

Google's plan is to let readers to search through millions of copyrighted books online, browse passages and purchase copies.

But the deal also would allow Google -- and only Google -- to digitize so-called orphan works, which has raised some eyebrows in antitrust circles. Orphan works are books or other materials that are still covered by U.S. copyright law, but it is not clear who owns the rights to them.

"Essentially, it gives Google a free pass for infringement for selling all these books," said James Grimmelmann, who teaches at the New York Law School. "Publishers (who are part of the settlement) would be happy to share the monopoly with Google."

Grimmelmann said he was part of a recent conference call with Justice Department lawyers, who asked questions about Google's proposed settlement.

Grimmelmann said the Justice Department lawyers did not indicate what their concerns were.

"I have no idea what they're thinking," he said.

Peter Brantley of the Internet Archive, which also digitizes books, said his organization had "multiple conversations" with the Justice Department about the Google plan.

"There are legitimate antitrust issues related to Google's ability to solely commercialize this content," Brantley said, adding he hoped the settlement agreement would be rejected by U.S. District Judge Denny Chin.

"We would like the court to say: 'This is fine theoretically, but these orphan books, they don't have anyone to speak for them, so let's take them out of the agreement,'" he said.

Neither Google nor the Justice Department had any immediate comment.

Judge Chin granted a four-month extension on Tuesday to a group of authors deciding whether they want to opt out or object to the settlement.

The judge set a final settlement hearing on October 7 for court approval. If approved, it would bring to a close an almost four-year long legal challenge of Google's plan to make many of the world's great books searchable online.

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