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Google digital book 'monopoly' feels heat

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Complaints over Google's sweeping digital books settlement have reached a boiling point. And Google wants you to know that Microsoft is funding some of the heat.

In October, Google reached a $125m agreement with the US Authors Guild and the Association of American Publishers, hoping to settle a three-year-old class action suit that accused the company of infringing copyrights with its library-digitizing Book Search project. But the settlement still awaits court approval, and some, including The Reg, have questioned whether the pact hands Google a ridiculously large slice of the future.

To date, the most notable voice has been Harvard University libraries boss Robert Darnton. In a February piece for The New York Review of Books, Darnton warned that the proposed settlement would grant Google "a monopoly - a monopoly of a new kind, not of railroads or steel but of access to information."

Under the settlement, the Mountain View Chocolate Factory would pay itself $34.5m to build and maintain a "Book Rights Registry" where authors and publishers can resolve copyright claims - in exchange for a pre-defined cut of Google's revenues. Other outfits could still launch their own book scanning operations, but in all likelihood, no one has the cash to play catch up.

"Having settled with the authors and publishers, it can exploit its financial power from within a protective legal barrier, for the class action suit covers the entire class of authors and publishers," Darnton wrote. "No new entrepreneurs will be able to digitize books within that fenced-off territory, even if they could afford it, because they would have to fight the copyright battles all over again. If the settlement is upheld by the court, only Google will be protected from copyright liability."

Since trumpeting Darnton's words hither and yon, the press had been all but quiet on the matter. But then, early last week, Wired tossed up a blog post entitled "Who's Messing With the Google Book Settlement? Hint: They're in Redmond, Washington." The New York Law School recently asked the court for permission to voice its concerns on the matter, and Wired took enormous pleasure in pointing out that the law school's Google Book Settlement project is funded solely by Microsoft.

According to The New York Times, Google soon sent this Wired link to a group of friendly reporters.

But with its own blog post and a lengthy story that appeared in the print edition of the Saturday Times, the paper rightly explained that the New York Law School is just one of the noteworthy names publicly questioning Google's settlement. The court will also hear concerns from the American Library Association and a collection of lawyers spearheaded by Charles Nesson of the Harvard Law School. And several other legal minds have spoken up, including Pamela Samuelson, co-director of the Berkeley Center for Law and Technology, and Columbia Law School's Jane Ginsburg.

And now, a familiar Google nemesis has called on the US Department of Justice to scrutinize the Book Search pact. Today, the consumer watchdog known only as Consumer Watchdog tossed a letter at US Attorney General Eric Holder and other DoJ officials, asking them to delay the settlement until some changes are made.

"Implementing such major changes in the way the publishing industry would function through a class action settlement is unprecedented," the letter reads. "Normally, Congress or regulatory bodies would be involved in a transformation of this magnitude and the interests of all stakeholders could be considered. Because this is not the case, it is all the more important for the Justice Department to intervene in the proposed settlement."

Consumer Watchdog is the consumer watchdog that Google famously tried to snuff out after taking issue with its press release tactics.

The not-for-profit has called for the removal of what it calls a "most favored nation" clause, saying that the settlement prevents would-be Google competitors from striking an improved rights deal with the Book Registry. "It is inappropriate for the resolution of a class action lawsuit to effectively create an 'anti-compete' clause, which precludes smaller competitors from entering the market. Given the dominance of Google over the digital book market, it would no doubt take more advantageous terms to allow another smaller competitor to enter the market."

The Watchdog also says thet the settlement's much-discussed "orphan works" provision should apply to all book digitizers - not just Google. The provision gives Google free rein to use works whose copyright holders haven't spoken up to claim them.

"The danger of using such works is that a rights holder will emerge after the book has been exploited and demand substantial infringement penalties. The proposed settlement protects Google from such potentially damaging exposure, but provides no protection for others. This effectively is a barrier for competitors to enter the digital book business."

Robert Darnton gives Google the benefit of the doubt, buying into the company's ongoing do-no-evil myth. "Google's record suggests that it will not abuse its double-barreled fiscal-legal power," he says. But he's still antsy. "But what will happen if its current leaders sell the company or retire?" Ultimately, there is no check on the price Google will charge for access to its digital books - except the authors and publishers in the Book Registry, and they have no interest in keeping price down.

The U.S. District Court for the Southern District of New York collect objections to the settlement until May 5, and a hearing is scheduled for June 11. ®

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