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DOJ: Google's book settlement needs rewrite

Concerns about Google's settlement with book authors are valid, the Department of Justice said in a filing with the court overseeing the settlement. But things could change.

The U.S. Department of Justice late 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 (click for PDF) with the U.S. 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 digitizing 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 U.S. history." Opponents claim that 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 nonprofit 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 recognizes the value the settlement can provide by unlocking access to millions of books in the U.S. We are considering the points raised by the Department and look forward to addressing them as the court proceedings continue," Google said Friday in a statement.

The Internet Archive, perhaps Google's most vocal opponent in this matter, was likewise pleased. "Despite Google's vigorous efforts to convince them otherwise, the Department of Justice recognizes 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 CEO of the Computer & Communications Industry Association, which has supported the settlement. "They are doing their job scrutinizing 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 digitization and digital libraries in a robust competitive market open to all organizations, 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 October 7 in New York. That is, unless the settlement is modified in the coming weeks, in which case we could be looking at several more weeks of debate.