The Department of Justice confirms its investigation into whether Google's $125 million Book Search settlement violates U.S. antitrust laws. Opponents fear the agreement gives the search engine giant too much power in the digital book world. The fairness hearing is set for Oct. 7, 2009.
The U.S. Justice Department July 2 said it is formally investigating
the $125 million settlement between
Google and authors and publishers that lets the search engine scan books online
and grant access to them for a fee.
Deputy Assistant Attorney General William Cavanaugh said in a letter to U.S.
District Court Judge Denny Chin the government is responding to concerns the
agreement violates the Sherman Antitrust Act.
"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," Cavanaugh wrote in the
letter. "However, we have determined that the issues raised by the proposed
settlement warrant further inquiry."
Chin is expected to review the settlement and said he will hold a fairness
hearing Oct. 7, 2009.
He invited the DOJ to present its views in writing by Sept. 18, 2009, and may appear at the
hearing in person to present its views.
Google and the Authors Guild raised eyebrows last October when they announced
of a class-action lawsuit, which the Authors
Guild and the Association of American Publishers filed against Google in 2005.
Authors and publishers filed the suit because they were concerned Google's
Book Search bid to scan millions of books from libraries and offer them online
would violate their copyrights. In the settlement, Google agreed to pay authors
and publishers $125 million for the right to scan and offer the books online to
individuals and libraries for money. Google also agreed to share sales from
Google Book Search with authors and publishers.
Libraries, consumer rights advocates and other parties expressed concern
such a deal would grant Google too much power in the online book realm,
particularly over "orphan works," or those books that are out of print and whose authors or rights holders are
Amazon CEO Jeff Bezos last month expressed
his disdain for the deal; Amazon licenses digital
book content from publishers to offer through its Kindle electronic-reading
More broadly, antitrust experts claim the move
is another sign of Google's growing power on the
Internet, but no other companies are currently promising to tackle the task of
organizing the world's books online. Microsoft pulled the plug
on its own book scanning effort in 2008.
Google appears unfazed by the DOJ inquiry. Google spokesman Gabriel Stricker
acknowledged to several news outlets that while it had been contacted by the
DOJ and state attorneys general about the settlement, it remains confident in
Some experts view
the move as a mere formality, noting that it
is just a move to have the matter heard in a court. Consumer rights advocates
take a more sanguine view of the DOJ's scrutiny.
"The fact that the Justice Department decided to formally notify the
judge in the Google Book Search class action settlement that it is
investigating the deal is an important development," consumer advocate for
Consumer Watchdog John Simpson said in an e-mail to eWEEK.
"It demonstrates that the Justice Department is taking antitrust
concerns raised by Consumer Watchdog, and others, very seriously."