Google Crosses Fingers on Book Settlement Deal

Google has opted not to attempt further renegotiations of its Digital Books settlement agreement with the Authors Guild despite objections the Department of Justice lodged earlier this month.

Instead, it is gambling that the judge will see its view of the matter. In a filing made Thursday at the U.S. district court in Manhattan, Google asked Judge Denny Chin to accept the US$125 million agreement it forged with the organization, arguing that it won’t hurt competition in the digital books space and, more importantly, will not violate the intellectual property rights of authors of so-called orphan works.

Rather, the agreement “will open the virtual doors to the greatest library in history, without costing authors a dime they now receive or are likely to receive if the settlement is not approved,” Google said.

Unfocused Anxiety

What Google is trying to do is appeal to the Judge on a more abstract level, Raymond Van Dyke, a partner with Merchant & Gould, told the E-Commerce Times.

“By claiming that the purpose of copyright law is to promote the creation, as well as the distribution, of expressive works, Google makes a bold assertion. They add that they have zero stake and zero share in the book market, and thus possess no monopoly power,” explained Van Dyke.

Of course, Google also took several swipes at the project’s detractors, a group that has grown since Google first announced its desire to provide online access to millions of books — works that are still under copyright, as well as many that are out of copyright or out of print.

The objectors do not identify the harm the settlement could cause, Google argues in its filings. “They raise anxieties about the scope of the [agreement] but fail to ground them in pertinent doctrine and offer no practical alternatives. Competitors such as Amazon raise anxieties about Google’s potential market position, but ignore their own entrenched market dominance.”

“Anxieties about what might be best for a particular objector should not become fatal to what is undoubtedly extraordinarily good for all class members and for the general public,” Google concludes.

Societal Transformation

It was objections first lodged by groups representing writers and publishers that prompted Google to reach a settlement agreement with the Authors Guild, a representative organization. However, protests continued to be heard from various quarters, including other industry groups representing rights holders, competing organizations such as Amazon, and the Department of Justice. The DoJ’s interest in the project is focused on potential antitrust issues as well as copyright concerns.

In response to the DoJ’s concerns, Google and the Authors Guild renegotiated their original agreement. Earlier this month, however, the Department of Justice said it still had serious concerns — namely that the settlement gave Google “significant and possibly anticompetitive advantages” to the extent that it could wind up being the only company in the digital marketplace with the rights to distribute those works in multiple formats.

It is hardly surprising that protests are coming from every quarter — from competitors, rights holder and the government. Simply put, Digital Books is a radical concept, said Van Dyke. “Just as with the music industry, many argue that all works, digitized, should be available. Google wants to be the vehicle for this enormous transformation of society.”

The hearing is scheduled for Feb. 18.

Fighting Chance

That Google chose not to go to the drawing board means the company thinks it has a fighting chance, Ryan Radia, analyst with the Competitive Enterprise Institute, told the E-Commerce Times.

“It by no means is a guaranteed win,” he said, “but the fact that Google has decided not to try to revise — for a third time — its agreement with the Authors Guild suggests that Google is either confident enough in its argument or just does not want to water it down anymore.”

It is not a given that the judge will automatically incorporate the Justice Department’s reasoning into his decision, Radia added. “Federal courts regularly view arguments differently than the DoJ in competition policy disputes.”

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