DOJ probes Google book search settlement

Feds meet with Google execs to discuss antitrust concerns raised by the pact

If the U.S. Department of Justice launches an antitrust case against Google Inc. challenging last year's settlement of a lawsuit filed against it by major authors and publishers, it could strike a blow to the company's plans to distribute books online.

A source close to the case Wednesday confirmed to Computerworld that Google officials are discussing the antitrust ramifications of the settlement with the DOJ, but added that the company is nonetheless moving ahead with developing a book search function according the parameters set by the settlement. The source also noted that the DOJ has not informed Google that a formal investigation into the settlement will be launched, but did note that another meeting is planned. The source said he could not disclose when the next meeting will be held.

The New York Times and the Wall Street Journal both reported this week that federal lawyers have met with both Google officials and critics of the settlement with the Authors Guild and the Association of American Publishers.

Critics of the settlement include the Internet Archive and Consumer Watchdog, according to the published reports.

The authors and publishers had filed a lawsuit against Google in 2005 charging that its original plan for a wholesale scanning and indexing of in-copyright books without permission amounted to massive copyright violations. The settlement reached last October calls for Google to pay US$125 million for the right to display chunks of the in-copyright books, not just snippets. Google can sell online subscriptions for access to the books and will contribute to a royalty system set up to compensate authors and publishers for access to their works.

"The trouble is that all of this is unexplored territory - the public interest in this information being widely available online, copyrights, author compensation," said Gordon Haff, an analyst with Illuminata, an industry analyst firm in Nashua, N.H. "It's all very complicated new territory. But there are legitimate concerns if Google is to become the primary gateway to all of the world's information."

If Google's vision of success is having the keys people need to access the world's information, then an antitrust lawsuit over the book search access plan could be a significant setback for the company, added Haff.

"Antitrust is an incredibly complicated area of law," he noted. "There are aspects that look like Google is being given certain monopoly rights. But they've been willing to negotiate and step back a bit when these issues have arisen in the past. Things will be worked out. I don't foresee a multi-year antitrust trial on this one."

Google wasn't sitting by the sidelines today, just waiting for the hubbub to pass.

In a blog post today, Adam Smith, director of product management for Google Book Search, touted the settlement as a means to expand people's access to books in the U.S.

"Have you ever gone to your local bookstore looking for a book only to be told that it's not there? You look for it on Amazon; they don't offer it," he wrote. "If you can't find them -- because the only known copy is at a library on the other side of the country -- you're unfortunately out of luck. Under the settlement, that will change for users in the U.S."

He added that because authors and publishers will be able to let users preview and buy in-print books through Book Search, readers will have more ways to accessing books.

Dan Olds, principle analyst with the Gabriel Consulting Group, said Google is looking at a very large potential market with the book search business. And he predicted that Google will fight tooth and nail if necessary to move forward with its plan.

"The aspect of the settlement that most interests the Justice Department is the clause that gives Google exclusive rights to works that are opted into the agreement," he explained. "Google will have the right to either offer or not offer these works to the public, at their discretion. That gives them a lot of power in the market. Works that Google deems inappropriate might not be available to the public, and the author or publisher could be prohibited from offering the work anywhere else."

He also noted that if the DOJ demands significant changes to the settlement, it could significantly cut the potential business for Google. "This is important to Google and we can expect a full court press from them on this issue," said Olds. "If the DOJ completely scuttled the deal, it would be a serious blow to Google's ambitions, but I still expect to see them hotly pursue this market. They're nothing if not persistent."

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