Antitrust Law - Monopolization - Southern District of New York Rejects Proposed Google Books Settlement Agreement

Harvard Law Review, March 2012 | Go to article overview

Antitrust Law - Monopolization - Southern District of New York Rejects Proposed Google Books Settlement Agreement


The digitization of books, periodicals, and other scholarly material is a growing trend. Modern society has demanded that any and all information be made available online, and the market has responded to this demand in a variety of ways, not the least of which includes the provision of greater digital access to scholarship. In 2004, Google gained access to several major libraries across the globe and sought to digitize their collections. (1) Google's attempts to provide public access to these extensive collections ultimately led to litigation, brought by a number of authors and publishers. Recently, in Authors Guild v. Google Inc., (2) the United States District Court for the Southern District of New York, citing a variety of concerns ranging from copyright to antitrust, rejected an Amended Settlement Agreement (ASA) designed to end the litigation and permit Google to take the most significant step in history toward developing a universal digital library. (3) Unfortunately, in the antitrust portion of its ruling, the court undervalued the significant long-term benefits of the ASA and overestimated the short-term anticompetitive costs.

In 2004, Google announced a new partnership with the New York Public Library and the libraries at Harvard University, Stanford University, the University of Michigan, and the University of Oxford to digitize these libraries' collections, (4) a project that eventually gave birth to the Google Books program. Since entering into this partnership, Google has scanned more than twelve million books from these collections. (5) In exchange, Google provides each partner library with digital copies of that library's books. (6) Google's primary goal, however, was to create a searchable electronic database of books. (7)

In 2005, a series of plaintiffs--the Association of American Publishers, individual authors, and numerous publishing companies(8)--sued Google for unauthorized digitization of books still under copyright. (9) In bringing this action, the plaintiffs sought to represent a class of "all persons or entities that have a United States copyright interest in one or more Books."(10) Claiming that Google had engaged in "massive copyright infringement," the plaintiffs sought damages as well as injunctive and declaratory relief against Google's present infringement and sought declaratory and injunctive relief against Google's future digitization of library collections. (11)

On November 13, 2009, Google and the plaintiffs agreed upon and filed the ASA. (12) While substantially similar to an earlier proposed settlement, (13) this settlement included major changes in response to criticism from class members. (14) The ASA was designed as an agreement between Google and "all Persons that, as of January 5, 2009, have a Copyright Interest in one or more Books or Inserts."(15) The ASA would permit Google to continue digitizing books, to advertise on electronic book pages, to sell subscriptions to an electronic database housing the digitized books, and to sell online access to individual books. (16) However, Google's access would be nonexclusive, allowing rightsholders to license use of their books to Google's competitors. (17) Moreover, rightsholders would maintain the authority to prevent Google from digitizing their books and to demand that Google remove their books from the electronic database. (18) Those rightsholders who chose to keep their works in Google Books would provide their rights information to a newly formed Book Rights Registry and receive payments in accordance with the ASA's revenue-allocation scheme, (19) under which rightsholders would be paid sixty-three percent of all revenues received from Google's use of their books. (20) Furthermore, Google would commit at least $45 million to a settlement fund to pay those rightsholders whose books had already been digitized. (21) Google would also have the authority to digitize and display so-called "orphan books," or books without identified rightsholders. …

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