DOJ Criticizes Amended Google Books Settlement

February 4, 2010. The Department of Justice's (DOJ) Antitrust Division filed a pleading [31 pages in PDF] with the U.S. District Court (SDNY) in Authors Guild v. Google regarding its continuing objections to the amended proposed class action settlement, also known as the amended settlement agreement, or ASA.

See, amended settlement agreement [173 pages in PDF] and original agreement marked up with amendments [179 pages in PDF], and story titled "Amended Settlement Agreement Filed in Google Books Case" in TLJ Daily E-Mail Alert No. 2,015, November 16, 2009.

The DOJ also filed objections to the original agreement. See, story titled "DOJ Files Pleading in Google Books Case" in TLJ Daily E-Mail Alert No. 1,985, September 21, 2009.

The DOJ wrote in its latest filing that "Despite this substantial progress, substantial issues remain. Although the United States believes the parties have approached this effort in good faith and the ASA is more circumscribed in its sweep than the original Proposed Settlement, the ASA suffers from the same core problem as the original agreement: it is an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the Court in this litigation. As a consequence, the ASA purports to grant legal rights that are difficult to square with the core principle of the Copyright Act that copyright owners generally control whether and how to exploit their works during the term of copyright."

The DOJ continued that "Those rights, in turn, confer significant and possibly anticompetitive advantages on a single entity -- Google. Under the ASA as proposed, Google would remain the only competitor in the digital marketplace with the rights to distribute and otherwise exploit a vast array of works in multiple formats. Google also would have the exclusive ability to exploit unclaimed works (including so-called ``orphan works´´) without risk of liability. The ASA's pricing mechanisms, though in some respects much improved, also continue to raise antitrust concerns." (Parentheses in original. Footnote omitted.)

John Simpson of the Consumer Watchdog stated in a release that "Google offered only minimal amendments to its original flawed deal and the key problems remain. The Department of Justice should be commended for standing firm in opposing this private deal that unfairly benefits the narrow agenda of one company".

Simpson also stated that "The settlement still abuses the class-action mechanism and purports to enroll absent class members automatically into new business ‘opportunities,’ in violation of current copyright laws ... This scheme acts to the disadvantage of absent class members and would result in unfair competitive advantages to Google in the search engine, electronic book sales, and other markets, to the detriment of the public interest. Along the way, the settlement raises significant international law and privacy concerns."

The parties to the ASA (Google, Author's Guild, and Association of American Publishers) released a joint statement. They wrote that "The Department of Justice's filing recognizes the progress made with the revised settlement, and it once again reinforces the value the agreement can provide in unlocking access to millions of books in the U.S. We look forward to Judge Chin's review of the statement of interest from the Department and the comments from the many supporters who have filed submissions with the court in the last months. If approved by the court, the settlement will significantly expand online access to works through Google Books, while giving authors and publishers new ways to distribute their works."

This case Authors Guild and Association of American Publishers v. Google, Inc., U.S. District Court for the Southern District of New York, D.C. No. 05 Civ. 8136 (DC), Judge Denny Chin presiding.