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Justice Department looking into Google Book settlement

April 28, 2009 |  7:38 pm

The U.S. Justice Department has started to make antitrust inquiries into Google's settlement with authors and publishers over the Internet giant's ambitious project to scan books and put them online.

Some authors and Google critics have complained that the deal, agreed upon last year and pending a judge's approval, would hurt competition by giving the company a stranglehold over the burgeoning market for online books.

The Justice Department has met with Google at least once in the last several weeks about the settlement, and more talks are scheduled for the near future, according to a person familiar with the matter, adding that Google has not been notified that a formal investigation has been launched.

Inquiries by law enforcement officials do not necessarily lead to formal investigations, nor even to a public objection by the agency.

The Justice Department also contacted Consumer Watchdog after the Santa Monica advocacy group sent it a letter expressing concerns about the deal.

"They talked to us with what I thought was great interest," said John Simpson, an advocate with Consumer Watchdog who participated in an hourlong discussion with Justice Department attorneys.

Google declined to comment, and a Justice Department spokesman was not immediately available.

In other developments in the case today, U.S. District Judge Denny Chin extended, from May 5 to Sept. 4, the deadline for authors to opt out of the Google Book settlement. Chin had been ...

... petitioned by a New York law firm representing several authors, including the estate of John Steinbeck, and by professors at the UC Berkeley School of Law to extend the deadline to give authors more time to absorb the 134-page settlement, a document whose complexity was not lost on those who read it.

"I'm a lawyer, and I found the settlement agreement to be a pretty tough go," said Pamela Samuelson, a professor who wrote the petition on behalf of her colleagues.

"The settlement is really detailed," Google spokesman Gabriel Stricker said.  "We want to make sure that rights holders everywhere have enough time to think about it and make sure it's right for them."

The case began in 2005, when the Authors Guild and the American Assn. of Publishers filed separate lawsuits against Google, alleging that the search company's violated copyright laws. Google scanned books and stored them on its computer servers so Web surfers could search through and read them on a browser. For copyrighted titles, Google Book Search allows readers to flip through only a few pages, whereas works in the public domain are often available in their entirety.

The three parties settled the suits in October 2008 with an agreement that would allow Google to scan the copyrighted books and eventually sell the digitized contents to consumers, either as individual books or through all-you-can-read subscriptions. Google would keep 37% of the revenue, while authors and publishers who had joined the settlement would split the other 63%.

As of November 2008, Google had scanned 7 million books. Of those, 4 million are so-called "orphan" works whose copyrights have not yet expired but whose authors could not be located by the company.  Advocates are concerned that the settlement would give Google a monopoly over the rights to a vast collection of orphaned works.

The strength of that market position would be enhanced, critics say, by the apparent legal immunity the settlement grants the company from future claims by the owners of orphaned books. Competitors would not have such protection.

-- Alex Pham and David Sarno

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