Former antitrust enforcer defends Google book settlement

The Google book service may allow other vendors to follow in its footsteps, an antitrust lawyer says

A proposed settlement between Google and book publishers and authors that would allow the tech giant to digitize and sell millions of books raises no serious antitrust concerns and, in fact, should blaze a trail that allows other companies to do the same thing, a former U.S. antitrust enforcer said Tuesday.

The settlement, reached last October and now under review by a U.S. district judge, clears up some sticky copyright questions about the legality of scanning and selling books in a digital format, and it could serve as a model for other companies that want to do the same thing, said David Balto, a former antitrust attorney with the U.S. Department of Justice and the U.S. Federal Trade Commission.

"We have to start off and really recognize what Google has accomplished," said Balto, now a senior fellow at the Center for American Progress, a liberal think tank. "Google, at its own expense and its own risk, went into an agreement with major research libraries to scan millions of books to create a library of unprecedented dimensions."

While there are some barriers to other companies wanting to digitize books -- particularly the cost -- the settlement creates no new obstacles to potential Google competitors, Balto said during a panel discussion on the settlement hosted by the Computer and Communications Industry Association (CCIA).

In early July, the U.S. Department of Justice said it was investigating the settlement and Google's Book Search product for possible antitrust violations. Several groups have complained that the settlement could give Google exclusive power to monetize so-called orphaned works, books still under copyright protection but for which no one claims ownership.

Others on the CCIA panel raised concerns about the settlement. While other companies may be able to scan and sell books, Google will be the only vendor offering an extensive digital portfolio to libraries under an institutional subscription, said Jonathan Band, a lawyer for the Library Copyright Alliance, a coalition of three library groups.

University and large city libraries will be under great pressure by users to subscribe to Google Book Search, and will have little choice but to pay the prices set by Google and the nonprofit Book Rights Registry set up in the settlement, he said.

Universities without access to Google Book Search will be less attractive to prospective students, he said.

While Google may try to keep institutional subscription prices low, the Book Rights Registry, representing authors and publishers, will have an incentive to drive prices up, Band added.

"There's essentially going to be one supplier," he said. "It's almost like a utility that will need to be regulated."

The U.S. District Court for the Southern District of New York, which has a hearing scheduled on the settlement in early October, will need to continue to monitor the prices set by Google and the Book Rights Registry after the settlement goes into effect, Band said.

The settlement also gives Google a huge advantage in the digital books market, added James Grimmelmann, a law professor focused on tech-related issues at the New York Law School. The settlement has several good ideas in it, but many details need to be fixed, he said.

While the settlement allows Google to scan and sell books, there's no guarantee that other vendors could get the same deal, he said.

"I see higher entry barriers in a post-settlement world," Grimmelmann added. "Google now has access to a market that simply did not exist before and could not exist unless the settlement relaxed restrictions of copyright law."

The settlement doesn't address whether scanning complete books is a copyright violation, Grimmelmann added. Competitors who try to offer a similar service "may find that what they tried to do is illegal at the end of the day," he said.

But the settlement offers huge benefits to society as a whole, Balto argued. Consumers will be able to search and buy books formerly available only in a handful of libraries, he said.

"What Google has achieved is truly remarkable, and potentially transforms the availability of vast amounts of knowledge," he wrote in a paper distributed at the event. "[Google's book service] has the potential of substantially increasing access to a phenomenal amount of information for millions of consumers."

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