DOJ Shoots Holes Though Google Book Settlement

If any one business dealing represented the potential to reshape media, it's the Google Books class action settlement. The agreement has received some heavy criticism, though, clearly, the publishers and the one professional writers' group, the Authors Guild, involved in the negotiations seem to support it. (Usual caveat: I'm a book author who opted out of the settlement, which suggests that I see flaws, at least as to how it could affect me.) But now the Department of Justice filed a last minute memo in the case, and it gives a strong view of the problems the DOJ sees and the difficulty facing Google and its would-be publishing partners.

The 32-page memo does say that "a vibrant marketplace for the electronic distribution of copyrighted works, including in-print, out-of-print, and so-called 'orphan' works" is a worthy goal. The Authors Guild has been furiously spinning this as fundamental support for the agreement in an email sent to its members acknowledging that changes to the settlement would be necessary. However, going through this list of concerns that DOJ attorneys have make one wonder whether it would be possible to change things enough to leave a result satisfactory to either the publishers or Google. (Though my colleague David Weir at BNET Media thinks that the Obama administration may be more ambivalent than opposing.) Here are some concerns that the brief addresses:

  • There are potential conflicts among members of the class (those who own rights to books) as its currently defined and the agreement would deliver open-ended control of the rights of class members in a way that increases the conflict between the parties named in the suit and the class members who haven't been a part of the negotiation process.
  • The settlement goes beyond past conduct and allows Google to exploit copyrighted works for "unspecified future uses -- essentially authorizing, upon agreement of the Registry [the author and publisher representative in the process], open-ended exploitation of the works of all those who do not opt out from such exploitations." That leads to the question of whether "any class representative could adequately represent the interests of all owners of out-of-print works (including orphan works)."
  • The settlement treats in-print and out-of-print works differently, with Google need permission to use the former but not the latter unless the rights owners specifically opt out of the agreement. Any absent rights owner who does not claim owed money within five years forfeits the money to the rights owners already registered. Given the difficulty of finding rights owners of orphaned works, the settlement essentially pits the two groups against each other. But only the already registered rights owners negotiated the deal. Furthermore, the publishers will be able to negotiate separate agreements with Google while benefiting from the out-of-print works. Similarly, foreign rights owners have been inadequately represented during the negotiations, although they could have significantly different interests than those in the U.S., and notice about the suit was inadequate
  • Significant antitrust issues abound. Publishers would apparently be able to make competitive pricing by other services more difficult, because of collective bargaining on their part, and the settlement would effectively keep other companies from competing with Google.
  • There would be considerable implications to copyright law and the principle that right holders control what happens to their works.
In short, the DOJ take is that the court should encourage continuation of discussion among the parties. But the changes necessary to address the above points would be major and likely require a new settlement agreement.