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Court Urged to Reject Google Deal

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Sat, Sep 19, 2009 at 11:39 am

    Justice Dept. Cites Possible Copyright, Antitrust Violations

    The Justice Department urged a federal court on Friday to reject
    Google’s disputed settlement with book authors and publishers, citing
    concerns that the deal to create the world’s largest digital library
    could violate copyright and antitrust laws.

    The department’s antitrust division said in a statement it agreed
    with criticism that the deal, as currently constructed, could
    potentially lead to copyright infringements and may give Google an
    unfair advantage in the fast-growing digital book market.

    The department said the court should not accept the agreement unless
    Google, the Authors Guild and the Association of American Publishers
    make changes to address the government’s concerns. The Justice
    Department statement, posted late Friday night, acknowledged that a
    "properly structured settlement agreement in this case offers the
    potential for important societal benefits."

    In a statement, Google said: "We are considering the points raised
    by the Department and look forward to addressing them as the court
    proceedings continue."

    A Justice Department official, who spoke on the condition of
    anonymity because the investigation is ongoing, said talks this week
    with parties involved in the agreement were "very constructive. They
    are motivated to come up with modifications that might address concerns
    we raised."

    Specifically, the Justice Department suggested limiting the
    provisions for future licensing, a part of the settlement that some
    critics said would give Google dominant power over the licensing of
    digital titles. The agency also recommended adding more protections for
    the holders of rights to little-known books and eliminating the joint
    pricing deal between publishers and authors.

    The Justice Department said that "whatever the settlement’s ultimate
    scope," it should "provide some mechanism by which Google’s competitors
    can gain comparable access."

    The $125 million settlement with authors and publishers is a crucial
    step in Google’s effort to create a huge online library featuring
    millions of digitized books, including many rare titles. The search
    giant has argued that the digital archive would help expand research
    and open access to learning, particularly for the physically or
    financially disadvantaged.

    The deal is being reviewed by the U.S. District Court of the
    Southern District of New York. It has set a hearing on Oct. 7 to review
    whether the deal is anticompetitive or harmful for consumers.

    Critics of the agreement, including consumer groups and competitors
    Amazon and Microsoft, argue that it would give Google near exclusive
    licensing rights to millions of out-of-print books, potentially harming
    consumers by giving the company exclusive control over prices for
    digital books.

    "A single entity cannot be allowed to build a digital library based
    on a monopolistic advantage," said John M. Simpson, a consumer advocate
    with public interest group Consumer Watchdog.

    The U.S. Copyright Office last week criticized the settlement. At a
    congressional hearing, Marybeth Peters, register of the office, told
    lawmakers that the deal threatens to "create mechanisms by which Google
    could continue to scan with impunity, well into the future, and to our
    great surprise, create yet additional commercial products without the
    prior consent of rights holders."

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