New Google Book Settlement Aims Only to Placate Governments

What stands out after an initial review of the Google Book Search agreement is that changes were made to placate the governments of France, Germany, as well as the U.S. Department of Justice.
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Just past midnight on a Saturday morning may be a fine time to go to a jazz club in New York City. It is, however, an odd time and place to hold a press conference to announce the settlement of a lawsuit.

Yet, representatives of Google, the Authors Guild and the Association of American Publishers (AAP) apparently regarded the wee hours of November 14 as the optimal time to announce to the world the amended agreement they had just minutes before filed with a federal court to settle a lawsuit arising from Google's scanning of in-copyright books from major research libraries.

Holding the press conference at that hour had the distinct advantage of insulating the new deal from informed critical commentary for the first news cycle. It would take some time for the hundreds of objectors to version 1.0 of the Google Book Search (GBS) settlement to study revisions in GBS agreement 2.0, which now weighs in at 377 pages.

What stands out after my initial review of GBS 2.0 is that changes were overwhelmingly made to placate the governments of France and Germany, as well as the U.S. Department of Justice (DOJ).

Google is apparently hoping that if it can get these governments off its back, GBS 2.0 will be approved. Hundreds of authors, publishers and other interested parties raised dozens of objections to GBS 1.0, but their concerns were almost completely ignored. GBS 2.0, for example, does not address issues raised by academic authors about the risks of price gouging, lack of user privacy protections and restrictions on various uses that can be made of GBS books, even though most of the books in the GBS corpus are academic-authored books.

France and Germany, however, did get significant concessions. They, along with scores of foreign rights holders, had objected to GBS 1.0 because under it Google would have gotten a license to scan all foreign rights holders' books and to commercialize those that were not commercially available in the U.S. This scam would have meant that Google could have commercialized virtually all foreign books (which are generally not available in U.S. bookstores), unless their rights holders filled out complicated paperwork to protest this. No wonder German Chancellor Angela Merkel was so outraged by the proposed Google settlement that she made a speech excoriating Google for violating German copyrights at the opening of this year's Frankfurt Book Fair.

Under GBS 2.0 the only foreign rights holders who remain in the GBS settlement are those from the UK, Canada and Australia. Richard Sarnoff, chairman of AAP, explained that these countries had legal cultures and publishing industries similar to those in the U.S. How different, though, is New Zealand's legal and publishing culture from that of Canada or Australia? Could the omission of New Zealand from GBS 2.0 have something to do with the strong objections that New Zealand publishers made to GBS 1.0?

That GBS 2.0 will take foreign rights holders out of the settlement class does not necessarily mean that Google will no longer scan foreign books. Nor does it mean that foreign books already scanned by Google will be deleted from the corpus. These books will almost certainly be available for Google's use for non-display purposes, such as the development of better automated translation tools.

Being dropped from the settlement is also no guarantee that foreign books will not be commercialized. If foreign rights holders want to be certain that Google will stop scanning their books, remove the books from the GBS corpus, or cease commercially significant uses, they may have to sue Google to achieve their objectives.

GBS 2.0 also responds to DOJ's objections concerning GBS 1.0's treatment of funds from Google's commercializations of "orphan books," that is, books whose rights holders cannot be readily found through a reasonably diligent search.

GBS 1.0 would have diverted revenues generated by orphan books to the owners of other books if the orphan owners failed to sign up with the Book Rights Registry (BRR) within five years. This created a conflict of interest between registered and unregistered rights holders. BRR would be disinclined to look for unregistered rights holders if registered rights holders stood to benefit financially if the unregistered copyright owners never showed up.

GBS 2.0 calls for the appointment of a trustee to represent the interests of rights holders of unclaimed books. All monies collected for them would now be controlled by this new fiduciary and spent on tracking down the "parents" of these orphans.

These two measures should protect the orphans from one scam envisioned in GBS 1.0.

GBS 2.0 would allow this fiduciary to license unclaimed books to third parties (say,, but only if Congress passes legislation to authorize this. DOJ tried to persuade Google to allow other firms to get the same license to orphan books that Google will get from the settling class. But GBS 2.0 falls far short of that goal.

GBS 2.0 made some additional changes to respond to antitrust objections DOJ raised to GBS 1.0. For example, it dropped the "most favored nation" clause in GBS 1.0 that would have forbidden BRR from offering any of Google's competitors a more favorable deal than Google had made with AAP and the Guild.

It remains to be seen whether the DOJ will now bless the GBS deal.

To my mind, the most serious problem with GBS 1.0 has not been cured by GBS 2.0. Google will still get a de facto monopoly right to commercialize all out-of-print books, including the orphans, through the class action settlement process. No one else can get a comparable license, and hence no one else can offer a comprehensive database of books to allow competition in the market for institutional subscriptions.

Also unaddressed in GBS 2.0 are the deeply serious concerns raised by several objectors about whether the substantial restructuring of the future market for digital books envisioned by the GBS settlement can be accomplished through the class action process. Legislatures are the proper venue for radical restructuring of markets, not private lawsuits where secret negotiations among a few firms can yield a deal that works better for them than for thousands or millions of others who will be bound by the deal if the class action settlement is approved.

One can only hope that the judge who is responsible for deciding whether to approve the GBS settlement will recognize that the class whose rights he or she will be adjudicating include hundreds of objectors whose issues have yet to be addressed in GBS 2.0. France, Germany, and the DOJ are not the only objectors whose legitimate concerns about the GBS deal should be taken seriously.

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