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U.S. Opens Inquiry Into Google Books Deal

By THE NEW YORK TIMES

Wed, Apr 29, 2009 at 10:26 am

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SAN FRANCISCO, CA — The Justice Department has begun an inquiry into the antitrust implications of Google’s settlement with authors and publishers over its Google Book Search service, two people briefed on the matter said Tuesday.

Lawyers for the Justice Department have been in conversations in recent weeks with various groups opposed to the settlement, including the Internet Archive and Consumer Watchdog. More recently, Justice Department lawyers notified the parties to the settlement, including Google, and representatives for the Association of American Publishers and the Authors Guild, that they were looking into various antitrust issues related to the far-reaching agreement.

The inquiry does not necessarily mean that the department will oppose the settlement, which is subject to a court review. But it suggests that some of the concerns raised by critics, who say the settlement would unfairly give Google an exclusive license to profit from millions of books, have resonated with the Justice Department.

A spokeswoman for the Justice Department was not immediately available to comment. A spokesman for Google declined to comment. Representatives for the Association of American Publishers and the Authors Guild could not immediately be reached.

The settlement agreement stems from a class action filed in 2005 by the Authors Guild and the Association of American Publishers against Google. The suit claimed that Google’s practice of scanning copyrighted books from libraries for use in its Book Search service was a violation of copyrights.

The settlement, announced in October, gives Google the right to display the books online and to profit from them by selling access to individual texts and selling subscriptions to its entire collection to libraries and other institutions. Revenue would be shared among Google, authors and publishers.

But critics say that Google alone would have a license that covers millions of so-called orphan books, whose authors cannot be found or whose rights holders are unknown.  Some librarians fear that with no competition, Google will be free to raise prices for access to the collection.

Separately on Tuesday, Judge Denny Chin of Federal District Court in New York, who is overseeing the settlement, postponed by four months the May 5 deadline for authors to opt out of the settlement and for other parties to oppose it or file briefs. The decision follows requests by groups of authors and their heirs, who argued that authors needed more time to review the settlement.

Google, as well as the authors and publishers, have defended the settlement, saying it will bring benefits to authors, publishers and the public. They say it will renew access to millions of out-of-print books.

If the Justice Department decides to take action against the settlement, it will not be the first time that Google has found itself in the sights of federal regulators. Last year, Google abandoned a prominent advertising partnership with Yahoo after the department threatened to go to court to block the deal.

The Justice Department and the Federal Trade Commission have wrangled over jurisdiction over the book settlement, and the Justice Department won out, according to a person familiar with the inquiry.

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