The Department of Justice announced late Friday that it liked the idea of a vibrant marketplace for the electronic distribution of in print, out of print and so-called orphaned books. The DOJ also supported the creation of the independent “Book Rights Registry.” Officials expressed some concerns, but said it believed Google and its proposed partners could tweak the deal to meet those concerns.
The Computer & Communications Industry Association is a longtime advocate for fair, balanced competition within the tech sector as that leads to more innovation and more choices for consumers. CCIA appreciates that it is appropriate for the DOJ to review a deal of this size. Recognizing its importance, CCIA has also discussed several issues with parties to the settlement and others who may be impacted by it so we could best understand the issues raised, and reached our own conclusion.
The following statement can be attributed to CCIA President & CEO Ed Black:
“This is a major agreement, and it is entirely appropriate for DOJ to look at a deal of this magnitude. They are doing their job scrutinizing the competition aspects of this settlement.
“We believe this deal enhances competition among books and paves the way for competition in the online book marketplace, and helps disseminate information and knowledge in the best traditions of our industry. The DOJ makes a variety of arguments about class action procedure and antitrust. Some antitrust concerns outlined by the DOJ are overstated, and in any event can certainly be addressed. These should not be an obstacle to the court approving the legal settlement.
“Once this settlement is approved it will provide the legal certainty that will attract competitors to Google. What has kept would-be competitors away has been the fear of putting in the tedious work of scanning and indexing books – only to be blocked later by lengthy, and possibly frivolous infringement lawsuits. Google is the first company to meet the lawsuits head on. For that it deserves praise. If there is a villain in this ‘monopoly conspiracy’ plot – it’s our own copyright laws, and our inability to reasonably adjust them to fit the Internet and digital era.
“A deeper read of the terms of this agreement, our copyright laws and the history of companies and non-profits trying to create online book searches lead me to only one conclusion. This settlement deal paves the way legally for a variety of companies and non-profits to jump into the growing market of online book scanning, indexing and sales, to the benefit of the parties involved and Americans. The rest of the world will temporarily remain hobbled in their ability to advance in this area.
“We believe that to the extent that the DOJ has raised legitimate legal concerns, they can be addressed and this legal settlement can be allowed to pave the way for an unprecedented leap in access to knowledge. This settlement empowers readers not just to be able to find exactly what they need, but to lower barriers like the price of that book.
“The DOJ wisely says ‘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.’
“DOJ urges data to be made available in open standards, supported by a wide variety of applications. CCIA wholeheartedly endorses DOJ’s view on this. As described in CCIA’s brief, CCIA shares the Department’s concern that file formats should not be a bottleneck for innovation, or for competition. Google has already made a commitment to open standards, and CCIA applauds that commitment.”
“The settlement boosts competition for online book sales and even among the books themselves. Some critics have expressed concerns regarding Google’s license to use so-called orphan works, books for which the rightsholder can’t be found. These books have been out of circulation for some time and in many cases its because there was not a demand for them. The Google deal gets them back into circulation, competing alongside other books.
“Allegations of ‘monopoly’ imply that orphaned works represent a vast mine of untapped economic potential. But Authors Guild President Roy Blount has noted orphaned works by definition provided little commercial appeal for print publishers. There is no evidence that Google’s license to use books that no one wants will create a product with which no one can compete. These arguments belong in the humor section.”
“Finally, CCIA notes with approval the fact that the DOJ seems to have abandoned the dubious argument, raised by the Copyright Office in a Congressional hearing, that the Settlement raised concerns with international treaty obligations. ”
– The Justice Department’s filing today serves to aid Judge Chin’s consideration of whether the parties’ settlement satisfies Federal Rule of Civil Procedure 23.
– The October 7 fairness hearing is to ensure that the settlement is “fair, reasonable, and adequate” to the class plaintiffs, as required by the 2005 Class Action Fairness Act amendments to FRCP 23. The determination of whether the settlement satisfies Rule 23 standards will be made by the Judge Chin, not the Department of Justice. That determination will follow the fairness hearing.
– A judge may approve or reject a settlement. Contrary to suggestions by certain parties, neither Judge Chin nor the Department of Justice have the authority to “line-edit” a settlement by private parties. Nevertheless, a judge rejecting a settlement may identify the reasons for doing so, which may include objections to specific terms of the settlement.