Justice Department Confirms Investigation of Google Settlement

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The U.S. Department of Justice (DOJ) confirmed last week that it has launched an investigation to determine whether the settlement of copyright infringement lawsuits brought against Google by the Authors Guild and the Association of American Publishers (AAP) violates the Sherman Antitrust Act.

The New York Times reported that in a letter to the federal judge charged with reviewing the settlement Deputy Assistant Attorney General William F. Cavanaugh said, "At this preliminary stage, the United States has reached no conclusions as to the merit of those concerns or more broadly what impact this settlement may have on competition. However, we have determined that the issues raised by the proposed settlement warrant further inquiry."

U.S. District Court Judge Denny Chin has set a September 18 deadline for the government to present its views on the settlement in writing. The government will also be able to offer oral comments at a Final Fairness Hearing on October 7.

The settlement agreement, announced in October 2008 subject to court approval, resolves a class-action suit brought by authors and the Authors Guild and a separate lawsuit filed by five publishers representing AAP's membership. The lawsuits, filed in fall 2005, challenged Google's plan to digitize, search, and show snippets of in-copyright books and to share digital copies with libraries without the explicit permission of the copyright owner.

The agreement calls for Google to pay a minimum of $45 million into a Settlement Fund for copyright holders whose books were digitized on or before May 5, 2009, and $34.5 million to establish a Book Rights Registry, a nonprofit entity with authors and publishers equally represented on its Board of Directors, to oversee the resolution of claims and the distribution of payments. Google also agreed to pay the plaintiffs' legal fees and other administrative costs.

Google will allow users to see excerpts from books at no charge, and it will sell both access to individual books and institutional subscriptions to the database. Rightsholders will receive 63 percent of all revenue from sales, advertising placed on any page dedicated to the book, and other commercial uses. (Full details of the agreement are available on the Google Settlement site.)

Opponents to the agreement have voiced concerns that it sets up a new form of media consolidation that discourages competition and gives Google an exclusive license to sell "orphan" works (in-copyright, but out-of-print works whose rightsholders can't be found).

Google, AAP, and the Authors Guild stress that the deal is nonexclusive and will make a vast trove of previously out-of-print work widely available. Lawyers for the groups said they are confident the settlement will be approved. --Rosemary Hawkins