Google Books Settlement Needs Strong Court Oversight, Lawyers Say

Google’s size and popularity don’t mean it deserves “special scrutiny” under antitrust review, said Balto, now with the Center for American Progress. Google has “resolved to a large extent” the “Mexican standoff” over copyright among authors, publishers and service providers that had held back online posting and search of works, Balto said. That will help future competitors more easily join the market for book search. The number of orphan works to be posted exclusively by Google is relatively small, he said. The most-favored nations clause in the agreement, which would give Google the same favorable terms as offered to future competitors, is also relatively narrow and wouldn’t create a “bottleneck,” Balto said.

Grimmelmann agreed the settlement was a “cleverly engineered way of working around” nagging disputes in book search, but said problematic provisions must be reviewed to “salvage” the beneficial parts of the settlement. The “relative” barrier to market entry for book search will be raised because Google will have sole access to a brand-new market for five years -- as if a fictional company called “Moogle” got exclusive permission to sell previously-outlawed milk. Though not impossible, it’s “not guaranteed” that other companies could compete with Google, since to reach the same expansive terms, they would have to trigger a lawsuit with the expectation of a settlement -- generally a legal taboo, Grimmelmann said. Beyond the institutional subscription offering intended for universities, Google will also sell individual books and set its own prices if publishers don’t “affirmatively” set them, a “cartelish” behavior that should be reviewed, he said. Book search would be the only Google product where its market share wasn’t directly proportional to the quality of its offering, Grimmelmann said.

Access to Google’s institutional subscription will be “essential” for research libraries, who could lose talented students and faculty to other schools without it, Band said. Discussing the competitive landscape in five years is “theoretical and beside the point,” he said: “There are no competitors” for the moment and Google’s scanned library will easily dominate.

Libraries are worried that while Google will aim to keep subscription prices low, the Book Rights Registry -- controlled by “trade” authors and publishers -- will try to raise prices, Band said. That’s antithetical to the desires of academic authors, who prefer widespread access to their writing over profits -- and whose works could very well constitute most of those in the registry, he said. Libraries have asked the Justice Department to ensure that academic authors have adequate representation on the registry board, Band said. “It’s almost like a utility that will need to be regulated.” Though strong court oversight of the settlement’s implementation is probably good enough for now, the New York court -- which oversees rate disputes with collecting societies ASCAP and BMI -- could eventually become a rate court for digitized books, he added.

How the most-favored nations clause will work isn’t clear, Band said. The provision only takes effect if another provider gets a settlement that involves the scanning of unregistered, as opposed to orphan, works. But it’s “so obscurely drafted” that the provision may kick in unexpectedly if Congress approves legislation granting the use of orphan works, Band said.

Christal Sheppard, staff director for the House Judiciary Competition Policy Subcommittee, asked whether the exclusivity provisions would lock in rightsholders to Google for book search. Band said Google’s reputation and its deep coffers actually put rightsholders at ease in a way they wouldn’t be with other potential competitors, who probably couldn’t reach the same terms with rightsholders. Balto predicted the New York court would implement the same kind of settlement for future defendants in book-related copyright infringement litigation.

Another Judiciary Committee counsel, Eric Tamarkin, asked why not leave orphans out of the settlement. “At that point this settlement becomes useless,” Band said, because searching for owners of out-of-print works would pose “insurmountable” costs and authors may not come forward en masse to register. Balto sought to tamp down the relevance of orphan works. As metaphorical children of “indifferent parents,” orphan works have little market value -- like selling “ketchup-flavored ice cream,” he said. Grimmelmann said the orphan-works provision constitutes “private eminent domain” and should be closely monitored by the court. Google obviously values them or orphan works would have been left out of the settlement, he said. Not quite, Band said -- their value only comes “in aggregate” for research purposes.

Schools, Disabled Activists Support Settlement

The settlement got more support in recent filings with the New York court from disability-advocacy and school groups. But, in a HuffingtonPost article Tuesday, an influential law professor at the University of California- Berkeley, Pam Samuelson, expressed skepticism that the class registered under the settlement was inclusive enough to pass court muster.

“The settlement’s benefits for readers with disabilities are extraordinary,” said Andrew Imparato, president of the American Association of People with Disabilities. “People for whom transportation to a library or bookstore is difficult, unavailable or expensive” would benefit from online reading, as would those with vision loss, who could first search through Google to find books in “accessible” formats. The ability to freely search books on Google, and read them for free on library terminals, is another benefit for disabled people, “among the least employed” in the U.S. Imparato said the deal would also make it “easier for other providers to develop book services” and tailor features to disabled users.

The National Association of Federally Impacted Schools said the settlement would “provide unprecedented access to information essential to educational learning and discovery.” The group represents children living on Indian lands, in low- rent housing projects, and those whose parents are in the military or live or work on federal property. “The isolation engendered by longstanding and current funding inequities and the discrepancies in curricular opportunities limit the success of millions of children in the classroom,” said Executive Director John Forkenbrock.

U.S. treaty relationships with several countries mean foreign works will be covered equally by the Google settlement, Samuelson said in her article. The problem is that Google will determine the print status of books, and thus whether their rightsholders will be paid, using criteria such as whether they're available through “customary trade channels” such as bookstores. “This will disadvantage many foreign publishers or small and medium-size publishers of specialized books,” she said. The larger question is whether the Authors Guild and Association of American Publishers fairly represented all authors and publishers in negotiations leading to the settlement, and whether those authors’ interests will be fairly represented going forward. Samuelson said there are about 22 million authors of books published in the U.S. that are still in copyright, and about 8,000 members of the Authors Guild. “Many easily findable rights holders, particularly academic authors, would much rather make their works available on an open access basis than to sign up with the Registry,” she said.