Google Book Deal in DOJ Sights

(MoneyWatch)  The Department of Justice is showing increasing interest in the settlement between Google, book publishers, and the Authors Guild. And the way debate is shaping up in the publishing community, what had seemed a PR stroke of genius for Google -- make use of copyrighted material, wait to get sued, settle, and seem like a hero -- seems more likely to turn into an expensive and messy public black eye.

The civil investigative demands, or CIDs, are the strongest sign yet that the Justice Department may seek to block or force a renegotiation of the settlement, which was struck last year and has not yet been approved in court. It's also an indication of the more intense antitrust scrutiny promised by the Obama administration.

In 2004, Google started scanning books in a deal with some university libraries. In 2005, authors and publishers started suing Google, alleging that what Google was doing was making use of copyrighted material without permission. Last year they settled. (Disclosure: I'm a book author that opted out of the settlement.)

Back in October, I wrote that Google won big by losing to the publishing industry and settling for what was actually a trifling $125 million. But then the criticism started as people took a closer look at the terms of the settlement:

However, a new twist has emerged: Google will be able to sell electronic versions of books that have gone out of print. Depending on the very specifics of that agreement between publishers, Google, and the Authors Guild, all three have walked into a veritable quicksand of upcoming woe, argument, and potential law suits, all because they're forgetting a basic legal issue in most publishing.

The concerns, and the criticism, have only expanded since then.

• Some, like the Internet Archive, argue that the settlement would effectively give Google a virtual monopoly over so-called orphaned works. Books that were still in copyright, but for which the rights holders were not known or could not be located, would be open for the company's use.
• Librarians weighed in with concerns over the power Google would enjoy while questions of public interest might have been trumped by business concerns, including personal information of readers becoming property of the company.
• Copyright law expert Pamela Samuelson noted that roughly 70 percent of the seven million books that Google had scanned were in copyright but out of print, with most effectively orphaned works. Her criticism was that Google would have significant power to set prices and terms of use and, by law, be the only company that could authorize sale of the orphaned books.
• The Electronic Frontier Foundation has said that it is interested in the potential chilling effect on readers and authors of Google tracking every page and paragraph that someone reads.
• A freelance writing colleague of mine, Anita Bartholomew, has noted that authors could get a better deal from the Google Books Partner Program and by opting out of the settlement.
• Microsoft apparently funded one group raising antitrust issues.

The criticism of Google has made some strange bedfellows, from authors concerned about their copyright and financial interests to librarians to the EFF, which might typically be more aligned with making information freely available. And the DOJ focus, and that some of state attorneys general, according to the WSJ, is clearly on the antitrust implications. Google is trying to push back through a PR campaign directed at regulators and legislators. Perhaps that's why it has been stepping up its public policy PR hiring, and Google claims to be unfazed by a total of three different antitrust investigations. The question is whether public relations and public bravado will be enough to stave off attention that is potentially expensive and distracting to management.

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