US regulators want rewrite of Google book settlement

The US Department of Justice on Friday urged the court overseeing Google's book-search settlement with authors and publishers to reject the settlement in its current form, although it strongly hinted that the parties are flexible on certain provisions.

"As presently drafted, the Proposed Settlement does not meet the legal standards this Court must apply," the DOJ said in a 32-page filing with the US District Court for the Southern District of New York. "This Court should reject the Proposed Settlement in its current form and encourage the parties to continue negotiations to modify it so as to comply with Rule 23 (a federal law governing class-action settlements) and the copyright and antitrust laws."

After Google was sued in 2005 for digitising out-of-print yet copyright-protected books by several groups representing authors and publishers, the parties settled out of court in October 2008. That deal granted Google sweeping rights to scan and display out-of-print books.

Ever since the settlement was announced, opposition has mounted to what one University of California at Berkeley professor recently called "the largest copyright licensing deal in US history".

Opponents claim Google and the plaintiffs overstepped their bounds in assigning the company the sole right to make digital copies of out-of-print books that are still protected by copyright law.

"The Proposed Settlement is one of the most far-reaching class action settlements of which the United States is aware; it should not be a surprise that the parties did not anticipate all of the difficult legal issues such an ambitious undertaking might raise," the DOJ wrote in its filing.

The DOJ has been looking into antitrust concerns stemming from the fact that Google and the not-for-profit Books Rights Registry set up to handle payments to authors would have sole control over the pricing of institutional subscriptions to the digital library.

But in its filing, it also raised questions about whether the settlement complies with Rule 23 of the Federal Rule of Civil Procedure as well as copyright law in general. "In the view of the United States, each category of objection is serious in isolation, and, taken together, raise cause for concern."

Still, the DOJ noted that a digital library of books holds important benefits for society, a point that has been repeatedly raised by Google's supporters, who argue that it would improve access to knowledge. It would appear that the DOJ, however, would prefer Congress settle the thorny issues of copyright laws that apply to orphan works — books whose rightholders cannot be located but which can be scanned by Google under the agreement — rather than making policy through legal settlements.

"As a threshold matter, the central difficulty that the Proposed Settlement seeks to overcome — the inaccessibility of many works due to the lack of clarity about copyright ownership and copyright status — is a matter of public, not merely private, concern. A global disposition of the rights to millions of copyrighted works is typically the kind of policy change implemented through legislation, not through a private judicial settlement," the DOJ wrote.

Reaction to the DOJ's filing allowed parties from all sides of this issue to claim victory.

"The Department of Justice's filing recognises the value the settlement can provide by unlocking access to millions of books in the US. We are considering the points raised by the Department and look forward to addressing them as the court proceedings continue," Google said on Friday in a statement.

The Internet Archive, perhaps Google's most vocal opponent in this matter, was also pleased. "Despite Google's vigorous efforts to convince them otherwise, the Department of Justice recognises that there are significant problems with terms of the proposed settlement, which is consistent with the concerns voiced with the Court by hundreds and hundreds of other parties," the Open Book Alliance said in a statement.

"This is a major agreement, and it is entirely appropriate for DOJ to look at a deal of this magnitude," said Ed Black, president and chief executive of the Computer & Communications Industry Association, which has supported the settlement. "They are doing their job scrutinising the competition aspects of this settlement."

And Consumer Watchdog, a strident opponent of the settlement, also found something to like in the DOJ's filing: "Consumer Watchdog supports digitisation and digital libraries in a robust competitive market open to all organisations, both for-profit and non-profit, that offer fundamental privacy guarantees to users.

"But a single entity cannot be allowed to build a digital library based on a monopolistic advantage when its answer to serious questions from responsible critics boils down to: 'Trust us. Our motto is: Don't be evil'."

Google will learn whether it has earned that trust from Judge Denny Chin on 7 October in New York.