Inside Google

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."