Department of Justice, in Court Filing, Urges Major Changes to Google Settlement
Copyright, antitrust concerns raised; library community's issues not at forefront
Norman Oder -- Library Journal, 09/21/2009
- Settlement in current form should be rejected
- Delays likely
- More competition for institutional databasee
- Need to address concerns of rightsholders
The U.S. Department of Justice (DoJ), in a “Statement of Interest" filed with the federal court considering the proposed Google Book Search settlement, acknowledged the potential benefits from the settlement—including increased availability of books “effectively off limits to the public,” full-text search, and access for those with print disabilities—but said the “significant legal concerns” it raises require major changes.
Thus it recommended rejection of “the Proposed Settlement in its current form” and encouraged further negotiations.
While reflecting the concerns of certain rightsholders, potential competitors to Google, and even the Register of Copyrights, the DoJ did not, however, directly address three issues raised by library organizations and some allies: the price of institutional subscriptions; privacy; and the interests of academic authors, who prefer widespread availability of their work to potential financial return. (For LJ's editorial commentary, see "The Google Wars.")
While Google and the plaintiffs, represented by the Authors Guild and the Association of American Publishers (AAP), have until October 2 to respond to the plethora of objections and comments filed with the court, and a hearing is scheduled for October 7, the DoJ’s essential opposition makes it increasingly likely that the October 7 fairness hearing, or at least its outcome, will be delayed, suggests LJ sibling publication Publishers Weekly.
The DoJ’s preliminary solution to concerns about pricing the institutional subscription database focus on competition, not oversight (as library organizations have proposed), stating, “Consumers may benefit from the creation of digital libraries that would not otherwise be feasible, but they should not be required to pay the price of eliminating competition among authors and publishers on the one hand and de facto exclusive control of the library by Google on the other.”
However, even if Google's competitors could get comparable access to orphan works, Google has an enormous head start.
Copyright and more
The DoJ seems to be taking seriously critical comments made before Congress on September 10 by Register of Copyrights Marybeth Peters, though, unlike Peters, seems willing to countenance a private settlement, albeit with major cautions. (It said that Congress should act "if necessary.")
“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 said.
“If such a significant (and potentially beneficial) policy change is to be made through the mechanism of a class action settlement (as opposed to legislation), the United States respectfully submits that this Court should undertake a particularly searching analysis to ensure that the requirements of Federal Rule of Civil Procedure 23 (“Rule 23”) [regarding class action settlements] are met and that the settlement is consistent with copyright law and antitrust law."
“In the view of the United States, each category of objection is serious in isolation, and, taken together, raise cause for concern,” the DoJ said.
Still, the DoJ acknowledged that digitization of previously inaccessible works, and the provision in accessible formats, represents “important public policy goals.
“Second, the end result should be a marketplace in which consumers can be assured that they are paying competitive prices... [and have] multiple outlets from which to obtain access to works,” DoJ said. “Third, the structural safeguards of Rule 23 must be satisfied to ensure that the rights of absent class members are fully protected.”
While the DoJ noted that the only question before the Court concerns approval of the settlement, given ongoing discussions, “the public interest would best be served by direction from the Court encouraging the continuation of those discussions between the parties and, if the Court so chooses, by some direction as to those aspects of the Proposed Settlement that need to be improved.”
The parties to the lawsuit—Google, the Authors Guild, and the AAP—issued a statement late Friday: “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.”
The Open Book Alliance, which includes competitors to Google, the Internet Archive, some library groups, and authors’ groups, said, “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 American Library Association said it was still reviewing the DoJ's comments.
While “[v]arious commenters have suggested that the Proposed Settlement must be limited to compensation for past conduct and should provide for little in the way of forward-looking relief,” the DoJ disagreed, but expressed concern about provisions “that authorize the [Book Rights] Registry to license Google to exploit the copyrighted works of absent class members [who don't opt out] for unspecified future uses.”
“The parties appear willing to address this problem by limiting the future rights that may be controlled by the Registry and Google,” the DoJ said.
Despite Google’s effort to give notice to the rightsholders to in-copyright but out-of-print “orphan works," the DoJ said it’s not enough. “Moreover, no amount of notice is likely to protect those orphan rightsholders who are unaware of their rights or unclear how or whether they want to exploit them. Yet, if an out-of-print copyright owner does not come forward within five years, profits from the commercial use of the out-of-print work are distributed to pay the expenses of the Registry and then to the Registry’s registered rightsholders.”
In a footnote, the DoJ cited Peters’s testimony before Congress that the settlement would “alter the traditional understanding of copyright law.”
It also noted that “the Proposed Settlement raises concerns about the adequacy of representation with respect to foreign rightsholders,” given opposition expressed by the governments of France and Germany.
As to whether there had been sufficient notice of the settlement to rightsholders, the DoJ said the record is “undeveloped,” but the Court should “undertake a searching inquiry” into the issue.
“As a threshold matter, changing the forward-looking provisions of the current Proposed Settlement applicable to out-of-print rightsholders from an opt-out to an opt-in would address the bulk of the Rule 23 issues raised by the United States,” the DoJ said. “This would put the out-of-print rightsholders and in-print rightsholders in the same situation and respond to a significant concern expressed by foreign rightsholders."
“With respect to the interests of owners of out-of-print works (or any rightsholder that does not receive notice), extending the time for opting out of the class and for claiming escrowed profits owed to unknown rightsholders would minimize potential conflicts,” the DoJ suggested.
As for foreign rightsholders, the DoJ suggested that the court consider an opt-in, rather than an opt-out and add "foreign owners of in-print and out-of-print works to the class representatives.”
The DoJ said it was still investigating whether the proposed settlement violates antitrust law but suggested that the parties had not “convincingly addressed” concerns that “other digital distributors may be effectively precluded from competing with Google in the sale of digital library products and other derivative products to come.”
“Google’s competitors are unlikely to be able to obtain comparable rights independently,” the DoJ added. “They would face the same problems – identifying and negotiating with millions of unknown individual rightsholders – that Google is seeking to surmount through the Settlement Proposal. Nor is it reasonable to think that a competitor could enter the market by copying books en masse without permission....”
The library subscription
“This de facto exclusivity (at least as to orphan works) appears to create a dangerous probability that only Google would have the ability to market to libraries and other institutions a comprehensive digital-book subscription,” the DoJ said.
“This risk of market foreclosure would be substantially ameliorated if the Proposed Settlement could be amended to provide some mechanism by which Google’s competitors’ could gain comparable access to orphan works (whatever such access turns out to be assuming the parties negotiate modifications to the settlement)."
The letter ended with two additional considerations, one of which was the support for Google’s pledge to “provid[e] accessible formats and comparable user experience to individuals with print disabilities.”
"Second, given the nature of the digital library the Proposed Settlement seeks to create, the United States believes that, if the settlement is ultimately approved, data provided should be available in multiple, standard, open formats supported by a wide variety of different applications, devices, and screens. Once these books are digitized, the format in which they are made available should not be a bottleneck for innovation.”