Inside Google

Concerns Over Class Action, Copyright, Antitrust Law

The US Department of Justice has advised a federal court to reject Google’s $125 million book-scanning settlement with American authors and publishers, citing concerns over class action, copyright, and antitrust law.

But in the same legal breath, it urged the parties involved in the case to continue discussions intended to alleviate the department’s concerns. Earlier this week, Bloomberg News revealed that Google had joined authors and publishers in considering tweaks to the settlement.

"Given the parties’ express commitment to ongoing discussions to address concerns already raised and the possibility that such discussions could lead to a settlement agreement that could legally be approved by the Court, the public interest would best be served by direction from the Court encouraging the continuation of those discussions between the parties and, if the Court so chooses, by some direction as to those aspects of the Proposed Settlement that need to be improved," reads the DoJ statement filed with the US District Court for the Southern District of New York late on Friday.

"Because a properly structured settlement agreement in this case offers the potential for important societal benefits, the United States does not want the opportunity or momentum to be lost."

To which we say: Bravo DoJ.

The Open Book Alliance – a group of organizations that opposes the settlement – said much the same. "The Open Book Alliance is pleased with the action taken today by the Department of Justice, which we believe will help to protect the public interest and preserve competition and innovation," reads a statement from the alliance, whose members include Amazon, Microsoft, and the Internet Archive.

"Despite Google’s vigorous efforts to convince them otherwise, the Department of Justice recognizes that there are significant problems with terms of the proposed settlement, which is consistent with the concerns voiced with the Court by hundreds and hundreds of other parties."

In October, Google settled a lawsuit from the US Authors Guild and the Association of American Publishers over its Book Search project, which seeks to digitize texts inside many of the world’s leading research libraries. To date, the web giant has scanned more than 10 million titles, many of which are still under copyright. The pact creates a "Book Rights Registry" where authors and publishers can resolve copyright claims in exchange for a predefined cut of Google’s revenues.

But it also gives Google the unique right to digitize and sell and post ads against "orphan works," books whose rights are controlled by authors and publishers who’ve yet to come forward. And though other outfits could negotiate the rights to titles in the Registry, the Registry alone would have the power to set prices. Many are concerned that authors and publishers would have no incentive to keep prices down.

With its filing, the DoJ proposed several changes to the settlement, including providing additional protections for unknown rights holders and allowing Google’s competitors to gain comparable access to the settlement.

The DoJ was also praised by the consumer watchdog known as Consumer Watchdog, a notorious thorn in Google’s side. But the watchdog argues that even if the DoJ’s concerns are alleviated, the court should reject the settlement. "Solving the antitrust problem is only [part] of the problem,” said Consumer Watchdog’s John Simpson.

"Another deal-breaker should be the complete lack of privacy guarantees. Google, under pressure from the Federal Trade Commission, released a so-called ‘privacy policy’, but what’s to stop them from changing it the day after a settlement is approved on a corporate whim?" Indeed, the settlement does not deal with the privacy issue.

The court is set to hold a fairness hearing on settlement on October 7.