It’s not really a surprise or even news that the US Department of Justice (DOJ) confirmed yesterday it was formally investigating the terms of the Google Book Search settlement. This was known as far back as April and essentially confirmed last month by various publications reporting that formal requests (called “civil investigative demands”) had been issued to book publishers by the DOJ.
What happened yesterday was that the DOJ provided procedural notification to the court that the US is exploring the potential anti-trust dimensions of the Google settlement. The so-called “fairness hearing” to finalize the terms of the settlement will happen on October 7 and the US has until September 19 to “present its views in writing.” That’s not a lot of time.
What did the DOJ say in its two paragraph letter notifying the court of its formal investigation? Here’s the body of the letter:
The Sherman Anti-Trust Act is mentioned in the first paragraph of the government’s letter. The Sherman Act (and related subsequent legislation) is intended to promote competition and prevent consolidation of power and control over markets. For example, Microsoft was found in 2000 to have violated the Sherman Anti-Trust Act for too closely tying Internet Explorer to the Windows operating system.
One of the central questions the DOJ is exploring in its review of the Google Book Search settlement is whether Google gains exclusive rights or benefits to which other parties don’t have access. Some legal scholars have argued that Google does gain what amounts to a monopoly over so-called “orphan books,” books that are out of print but not yet in the public domain and where copyright owners are effectively impossible to locate.
Google has repeatedly said that the agreement is non-exclusive but has not discussed that contention in precise detail. Questions in the anti-trust investigation will include how much control Google has over the “corpus” (material scanned), over pricing of book sales and to what degree third parties can gain access to the material. (New York University is holding a conference on the Book Search Settlement for interested parties on October 8, a day after the fairness hearing.)
Unlike the Google-Yahoo paid search deal that Google walked away from to avoid a legal battle with the DOJ, the Book Search Settlement is different. Because of the underlying lawsuit Google cannot simply walk away here. Putting aside some of the less substantive issues (e.g., whether the attorneys fees are too high) as a basic matter there are essentially only two potential outcomes: approval of the existing settlement or modification of selected terms. If I had to bet I would bet that we will see some sort of modification further expanding third party access to the scanned material.
You can read the settlement itself or take a look at the public-facing Google Book Settlement website for rights holders and publishers. For additional context and background here’s our “library” of Google Book Search stories.