On Ars Technica, Timothy Lee has some excellent legal analysis of the Google Books settlement, which was just rejected by a US federal judge. Under the terms of the settlement, Google would get permission to scan, sell, and distribute all the books ever published, in exchange for a modest amount of cash paid in accord with terms set by the Washington-based Authors Guild (a small and reactionary pressure group that represents a minuscule fraction of all authors).
Lee points out that what Google had originally set out to do — index all the books, in the same way that it indexes all the web-pages — is arguably fair use, and Google could have mounted a fair use defense against the Authors Guild claim. A victory there would have paved the way for a competitive landscape of multiple search engines indexing books under the same legal theory.
But by settling with the Authors Guild, Google got far more rights than it ever could have exercised under fair use, and what's more, it set no precedent that its competition might take advantage of. Indeed, the acrimony following the settlement likely poisoned the water against any comparable future settlement from a competitor, and the terms of the settlement were extremely favorable to Google and its business model. Effectively, the settlement would have set in stone a virtual monopoly on book indexing for Google.
Lee wants Google to keep trying, but to focus its efforts on the fair use defense that would make it possible for competition to spring up in this sector, so that authors and publishers will have a number of services bidding to give them the best deal possible.
Second, Judge Chin noted that there were many conflicts of interests between the named plaintiffs (the Authors Guild and the Association of American Publishers) and copyright holders they were supposed to represent. For example, a group of academic authors argued that many academics seek to maximize access to their works, whereas the named plaintiffs were commercial authors and publishers focused on maximizing profits. The settlement was also opposed by numerous groups of foreign authors who argued that their interests had not been adequately represented in negotiations. They also argued that the opt-out requirements were particularly burdensome for foreign authors and that the settlement conflicted with international treaty obligations.
The settlement also raises significant antitrust concerns. The Obama Administration filed a formal objection to the settlement that largely focused on its anticompetitive effects. Judge Chin endorsed some of those concerns in his ruling, noting that the settlement–and especially the licensing of orphan works–would "arguably give Google control over the [book] search market." Google could index orphan works with impunity, while Google's competitors would have no realistic way to use such works.
Other objections did not impress Judge Chin. He dismissed arguments that copyright holders had had inadequate notice, pointing out that more than a million notices had been sent out and that the case had received widespread attention in the media. He also shrugged off privacy concerns. Strangely, Judge Chin cited objections focused on the privacy of users of Google's future online book service, but then focused on provisions guaranteeing the privacy of copyright holders in his response. In any event, Judge Chin had plenty of other reasons to reject the deal and so didn't belabor this one.
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