Afraid of Google taking over the world? The Justice Department seems to be. It recently confirmed its antitrust investigation into the Google Book Search Settlement, citing "public comments expressing concern" as impetus for the inquiry. European Union officials have also started sniffing around.
These concerns are misguided, and outmoded antitrust regulation will stunt the growth of the emerging book search market.
Google launched its Book Search project in 2004 with the worthy goal of digitizing and indexing the world's books. Litigation promptly ensued. In 2005, the Authors Guild filed a class-action copyright infringement suit on behalf of all owners of book copyrights.
In a settlement proposed last year, Google negotiated a license to digitize these books. Google would pay $45 million upfront, pay royalties on all book search revenues going forward, and create a registry to enable authors to receive payment. The settlement must be approved by Judge Denny Chin, who is presiding over the case and has slated a hearing for October.
The most contentious issue concerns "orphan works," copyrighted texts that are no longer in print and whose owners cannot be found. Without the aggregation of copyrights by the class-action lawsuit, Google would not have been able to obtain a license to these works. Some critics have argued that granting Google a license in this manner will exploit the rights of orphan works authors, which they claim should be in the public domain. Perhaps, but this is not a matter of antitrust concern.
Many of the public comments decrying the settlement come from Google's largest competitors. The Internet Archive, which has scanned 1.5 million books to date, claims that Google will monopolize the market for orphaned texts. But the comments by the Archive and others ignore a crucial fact.
The fact that orphan works are out of print implies that these books have little if any market value, and publishers do not consider them profitable to sell. Therefore, they are only available at the few libraries that stock them. In this state, orphan works are unlikely to ever be rediscovered by the market or gain popularity.
Digitizing orphan works will make them available, but there is no guarantee they would acquire market value or earn a profit. Google is paying a high upfront cost for this gambit in both infrastructure investment and settlement payments.
Given all that investment, antitrust penalties on Google would allow its competitors to free-ride on its investment. Internet Archive President Peter Brantley has advocated requiring open access to the orphan works. In practice, that would mean that after Google pays to scan all orphan works, its competitors will be able to pick and choose which ones to offer.
Furthermore, the claim that Google will have exclusive access to orphan works is unfounded. The settlement gives Google a nonexclusive license. New entrants can enter the market at will. Even if the only way to license these works is to settle another class-action lawsuit, the $45 million precedent makes litigation inevitable.
The court must consider whether the rights of orphan work authors will be fairly represented under the settlement. Consumer benefit, not pressure from the Justice Department, should guide the court's decision.
Google is creating a market for orphan works and is making them available for widespread access. Antitrust interference will only distort market incentives and hinder the growth of this nascent sector.