U.S. Inquiry Is Confirmed Into Google Books Deal

U.S. Inquiry Is Confirmed Into Google Books Deal
By MIGUEL HELFT
Copyright by The New York Times
Published: July 2, 2009
http://www.nytimes.com/2009/07/03/technology/companies/03google.html?th&emc=th


SAN FRANCISCO — The Justice Department confirmed on Thursday that it was conducting an antitrust investigation into the settlement of a lawsuit that groups representing authors and publishers filed against Google.

In a letter to the federal judge charged with reviewing the settlement, the Justice Department said it was reviewing concerns that the agreement could violate the Sherman Antitrust Act.

“At this preliminary stage, the United States has reached no conclusions as to the merit of those concerns or more broadly what impact this settlement may have on competition,” William F. Cavanaugh, a deputy assistant attorney general, said in the letter. “However, we have determined that the issues raised by the proposed settlement warrant further inquiry.”

The $125 million settlement agreement, which was signed in October and is subject to review by a federal court, was intended to resolve a class action lawsuit filed in 2005 by the Authors Guild and the Association of American Publishers against Google. In the suit, the authors and publishers said Google’s plan to digitize millions of books from libraries and make them available in its Book Search service amounted to a violation of their copyrights.

The settlement would give Google the right to display the books online, and to profit from them by selling access to individual titles and by selling subscriptions to its entire collection to libraries and other institutions. Revenue would be shared among Google, authors and publishers.

Antitrust experts said the letter was the latest indication that the Justice Department is seriously examining complaints that the agreement would grant Google the exclusive right to profit from millions of so-called “orphan works,” books that are out of print and whose authors or rights holders are unknown or cannot be found.

“This is the next step in the notion that this is a serious issue, so serious that the Justice Department needs to notify the court,” said Gary L. Reback, a lawyer at Carr & Ferrell, and the author of a recent book on antitrust issues. “It sets the stage for the department to come into the court to present a problem.”

In the letter, Mr. Cavanaugh confirmed that the Justice Department had issued formal requests for information, known as civil investigative demands, to various parties, and said the department’s lawyers would keep the court apprised of the investigation. Google and lawyers involved in the case said last month that they had received such requests.

In a response, United States District Judge Denny Chin of the Southern District of New York in Manhattan, who is charged with reviewing the settlement, set a deadline of Sept. 18 for the government to present its views in writing.

Judge Chin has scheduled a hearing on the settlement for Oct. 7 and said the government could also lay out its views orally at that time.

Opponents of the settlement hailed the department’s letter, saying it was a sign that the government was listening to their complaints.

“We are heartened that the D.O.J. is taking the concerns that we have expressed seriously,” said Peter Brantley, the director of access for the Internet Archive. Mr. Brantley’s organization is spearheading an effort to digitize books from libraries and make them broadly available, in competition with Google’s own digitization project. It has argued that the settlement would make it more difficult for the Internet Archive to pursue its plan.

Google and the other parties to the settlement have vigorously defended it.

“It’s important to note that this agreement is nonexclusive and, if approved by the court, stands to expand access to millions of books in the U.S.,” Gabriel Stricker, a Google spokesman, said in a statement.