Inside Google

WASHINGTON, DC —  Any plan offered by Google meant to overcome objections to the proposed Google Books settlement must include a “binding agreement with the full force of law,” Consumer Watchdog told the U.S. Justice Department today. Justice has until Friday to file its position on the books settlement with the court.

In a letter to Attorney General Eric Holder and Assistant Attorney General For Antitrust Christine Varney, the nonprofit, nonpartisan consumer group wrote that an offer such as that made last week by Google General Counsel David Drummond was “little more than a public relations ploy” unless there was a formal means of enforcement such as a consent decree.

Testifying before the House Judiciary Committee, Drummond said the Internet giant would allow others to sell the out-of-print books that Google has digitized. John M. Simpson, consumer advocate for Consumer Watchdog also testified to the Judiciary Committee opposing the settlement.

The letter to Justice, signed by Simpson,  noted that Google has demonstrated excellent access at the highest levels of government and easy access to policymakers, but expressed confidence the Department would judge the settlement on its legal merits.

“Several former executives have taken important roles in the Obama Administration. Google has built support in academia and the nonprofit world with generous contributions to projects that support its corporate ends,” the letter said.

“Substantial funding at institutions like Harvard’s Berkman Center and Stanford’s Center for the Internet and Society can mean that their programs become merely an extension campus of Google U, and serve as an echo chamber for the company’s policies, rather than centers for unfettered academic exploration of issues vital to the public interest.   Coupled with its recent charm offensive, such connections and efforts by Google to burnish its image may make it difficult for some to objectively evaluate Google’s behavior.”

“Nonetheless Consumer Watchdog is confident that the Justice Department is assessing the Google Books Settlement based on the legal merits and will conclude that it has anticompetitive aspects that must be thwarted,” the letter concluded. “If Google proposes ways to meet those objections, they must be incorporated into a binding agreement with the full force of law.”

Click here to read Consumer Watchdog’s letter.

The case in U.S. District Court’s Southern District of New York stems from a suit brought by The Authors Guild and the Association of American Publishers. Briefs in the case were due on Sept. 8, but Judge Denny Chin gave the Justice Department until Friday, Sept. 18, to file its view of the class action settlement.

The settlement provides a mechanism for Google to deal with “orphan works.”  Orphan works are works under copyright, but with the rights holders unknown or not found.  The danger of using such works is that a rights holder will emerge after the book has been exploited and demand substantial infringement penalties. The proposed settlement protects Google from such potentially damaging exposure, but provides no protection for others.  This effectively is a barrier for competitors to enter the digital book business.

In an amicus brief, filed by Kasowitz, Benson, Consumer Watchdog argued against the settlement, citing the anticompetitive monopoly it would create.  In addition, Consumer Watchdog’s brief said that the settlement should be rejected because it exceeds the controversy before the court; is an unauthorized attempt to revise the rights of copyright law, which is a Congressional prerogative; and conflicts with International Law.

Click here to read the brief.

Consumer Watchdog is also troubled that the settlement has no binding guarantees to ensure users’ privacy.  Readers in the United States expect that their reading habits will remain private.  Google will gather an unprecedented amount of data on users of Google Books. So far there is no adequate guarantee that whatever “privacy policy” Google adopts will not be changed on a mere corporate whim whenever it suits Google’s narrow agenda.

In April Consumer Watchdog asked the U.S. Justice Department to intervene in the Google Books settlement and Justice subsequently announced it was investigating the deal.  Simpson was one of eight witnesses who testified in opposition to the settlement at the Judiciary Committee Hearing last week.

Click here to read the testimony and see a video of the hearing.

Judge Chin has scheduled a hearing on the Google Books settlement for Oct. 7.

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Consumer Watchdog, formerly the Foundation for Taxpayer and Consumer Rights, is a nonprofit, nonpartisan consumer advocacy organization with offices in Washington, DC and Santa Monica, CA.  Our website is: www.ConsumerWatchdog.org.