The US Justice Department has confirmed its antitrust probe into Google's $125m book-scanning settlement with American authors and publishers, indicating that the ongoing investigation is an important one.
On Thursday, deputy attorney general William F. Cavanaugh sent a letter to the federal judge overseeing the proposed settlement, saying that the deal may run afoul of US antitrust laws. "The United States has reviewed public comments expressing concern that aspects of the settlement agreement may violate the Sherman Act," Cavanaugh wrote.
"At this preliminary stage, the United States has reached no conclusions as to the merit of those concerns or more broadly what impact this settlement may have on competition. However, we have determined that the issues raised by the proposed settlement warrant further inquiry."
In response to the letter, federal judge Denny Chin told the DoJ to present its views to the court by September 18, three weeks before a scheduled court hearing on the matter. The deal won't go into affect until it receives court approval.
In October, Google settled a lawsuit from the US Authors Guild and the Association of American Publishers over its Google Book Search project, which seeks to digitize works inside various big-name libraries. The settlement creates a "Book Rights Registry" where authors and publishers can resolve copyright claims in exchange for a pre-defined cut of Google's revenues. But it also gives the web giant an eternal license to scan and sell and post ads against so-called "orphan works," books whose rights are controlled by authors and publishers who have ceased to exist or can't otherwise be located.
And this license would be unique, creating a kind of legal monopoly in the world of digital books.
Google did not immediately respond to our request for comment. But naturally, it has long defended the deal. Speaking prior to the company's May shareholders meeting, Google senior vice president and chief legal officer David Drummond said that "anyone who wanted to go scan" books could "come up with a similar outcome," meaning anyone else could reach their own book settlement.
But this sort of talk is naive at best. In order to reach such a settlement, you'd have to start scanning books without regard for copyright and get yourself sued for multi-millions of dollars. "For Google to say that essentially anyone can scan these works and get themselves sued is not really an effective response," says Peter Brantley, a spokesperson for the Internet Archive, the not-for-profit that runs its own book scanning project. "It's as if Google is saying 'You can run across the freeway. Anyone can do that.'"
Yes, Brantley is pleased with the news from the DoJ. "The notification to the court signals that Justice has a very serious investigation underway, that it has uncovered enough to cement their opinion that the settlement needs further investigation," says Brantley, who has discussed the matter with the DoJ on a few occasions.
"We feel that's great. We think there are serious problems with the settlement and we feel heartened that Justice has reached the point that they understand the seriousness that the settlement implies for publishers, for libraries, for readers."
According to Google co-founder Sergey Brin, the settlement is nothing but a good thing for publishers, libraries, and readers - not to mention all of humanity. But Brin refuses to acknowledge that the pact would squeeze out anyone else interested in digitizing orphaned works, including the Internet Archive. In fact, he refuses to acknowledge that the Internet Archive exists.
"I didn’t see anyone lining up to scan books when we did it, or even now," Mr. Brin recently told The New York Times. "Some of them are motivated by near-term business disputes, and they don’t see this as an achievement for humanity."
Meanwhile, the Internet Archive has scanned over 150 million pages and put more than a million books online. Of course, its book scanning project is a little different from Google's. Its book scanning project actually acknowledges copyright.
"The Internet Archive does not have as extensive a book scanning operation as Google has done," Brantley says. "We haven't been scanning willy-nilly without concern for potential rights issues." ®
The word from Google: "The Department of Justice and several state attorneys general have contacted us to learn more about the impact of the settlement, and we are happy to answer their questions," the company tells us in a canned statement. "It’s important to note that this agreement is non-exclusive and, if approved by the court, stands to expand access to millions of books in the U.S."