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US Justice Department Probes Google Settlement

By THE FINANCIAL TIMES (UK)

Wed, Apr 29, 2009 at 10:40 am

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SAN FRANCISCO, CA — The US Department of Justice has begun informal enquiries into at least one aspect of Google’s sweeping settlement of lawsuits from book publishers and authors, according to two people familiar with the discussions.

The indications of potential concern from the anti-trust authorities could complicate a settlement that has been seen as a landmark in resolving Google’s often troubled relations with traditional media companies.

Agreed last October, the settlement is meant to resolve a four-year dispute over the GoogleBook Search service, under which Google makes digital copies of complete books but makes available only selected excerpts in response to users’ searches.

The service led to legal challenges from five publishers, including Pearson, owner of the Financial Times, as well as a class action brought on behalf of authors.

The justice department has approached Google and others about the settlement, according to the two people familiar with its enquiries, though its interest at this stage is believed to be informal.

These people said that the department’s lawyers have asked in particular about the treatment of so-called “orphaned rights”, or the treatment of copyright interests in situations where the immediate owner of the copyright cannot be traced.

Under the settlement, Google will pay less than other internet service providers in future in cases where the owners of orphaned rights make a claim for compensation.

John M. Simpson, an advocate with Consumer Watchdog, a California consumer group, said his organization had been contacted by justice department lawyers to discuss orphaned rights after protesting about this aspect of the Google book settlement early this month. Meanwhile, a second person said that the anti-trust agency had also held talks with lawyers for Google on the same issue in the last two weeks.

News of the potential anti-trust stumbling block came as a US judge on Tuesday held up the book settlement for four months after complaints that authors had been given too little time to assess the implications of the far-reaching deal.

The delay follows a request at the end of last week from the heirs and trusts of a number of authors, including John Steinbeck, Philip K. Dick and Arlo Guthrie. A lawyer representing these interests complained that authors had not been given enough time to consider the highly complex settlement, which he said would set the ground rules for an important area of future digital rights.

In a statement, a Google spokesman said the company was still “excited about the proposed settlement” and added: “As we’ve said previously, the settlement is highly detailed, and we want to make sure rights holders everywhere have enough time to think about it and make sure it’s right for them.”

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