Google makes concessions on e-book deal
Modified agreement offers more flexibility to offer discounts
Last Updated: Saturday, November 14, 2009 | 9:58 AM ET
The Associated Press
Google Inc. will loosen its control over millions of copyright-protected books that will be added to its digital library if a U.S. federal judge approves a revised legal settlement addressing the earlier objections of antitrust regulators.
The concessions, filed late Friday in New York Federal Court, come two months after the U.S. Justice Department balked at Google's original agreement with authors and publishers, warning the arrangement could do more harm than good in the emerging market for electronic books.
Google, the internet's search leader, is hoping to keep the deal alive with a series of new provisions. Among other things, the modified agreement provides more flexibility to offer discounts on electronics books and promises to make it easier for others to resell access to a digital index of books covered in the settlement.
Copyright holders also would be given more explicit permission to sell digital book copies if another version is being sold anywhere else in the world.
The changes are just the latest twist in a class-action lawsuit filed against Google four years ago by groups representing the interests of U.S. authors and publishers. The suit alleged Google's ambition to make digital copies of all the books in the world trampled over their intellectual rights.
Google negotiated a $125-million US truce nearly 13 months ago only to have it fall apart as a chorus of critics protested to U.S. District Judge Denny Chin, who must approve the agreement before it takes effect.
Among other complaints, the opponents said the plan would put Google in charge of a literary cartel that could illegally rig the prices of electronic books — a format that's expected to become increasingly popular.
Echoing some of these concerns, the Justice Department advised Chin that the original settlement probably would break laws set up to preserve competition and protect copyright holders, even if they can't be located.
French and German officials also protested the settlement, arguing that it's so broad that it could infringe on copyrights in their countries.
The revised settlement would apply only to books registered with the U.S. copyright office or published in Canada, the U.K. or Australia.
Much of the concern about the settlement has focused on whether it would give Google a monopoly on so-called "orphan works" — out-of-print books that are still protected by copyright but whose writers' whereabouts are unknown.
If the writers or their heirs don't stake a claim to their works, the original settlement calls for any money made from the sales of their books to go into a pool that eventually would be shared among the authors and publishers who had stepped forward to work with Google.
The revised settlement will designate an independent party to oversee the financial interests of the orphan books' copyright owners. Proceeds from the sales of orphan books also would be held for 10 years, up from five years in the original agreement.
Google already has gone into some of the largest U.S. libraries to scan about six million out-of-print books. So far, it has only been able to show snippets of those digital copies. A court-approved settlement would clear the way for Google to sell all those out-of-print books and scan even more into its index.
The Justice Department urged Google, authors and publishers to come up with an alternative plan because it believes the public will benefit by having more books — including millions no longer in print — available to anyone with an internet connection.
Even if the new agreement placates the Justice Department, Google could still face objections from powerful forces. Microsoft Corp., Yahoo Inc. and Amazon.com Inc. are part of a group called the Open Book Alliance that spearheaded the charge against the original settlement. It was unclear late Friday whether the changes will be enough for them to back off.
All the critics will have a chance to express any misgivings before Chin holds a hearing to review the pros and cons of the new settlement. A hearing date hasn't been set.
The Justice Department also wanted Google, the authors and publishers to make it easier for potential competitors to obtain licensing agreements similar to the ones Google would have.
