Monday, February 23rd, 2009 at 11:36 pm
[If you are unfamiliar with the terms of the Google Books Settlement, I strongly suggest you take a glance at this article for a quick and concise description of the important points.]
The Google Books Settlement has been widely hailed as a triumph for all parties involved: publishers, authors, libraries, and even Google. And while it’s not always the case that all parties at the table can leave it counting a win for themselves, what’s most remarkable is that the system set up by the settlement seems to leave the public much better off than it was before. After the settlement takes effect, millions of books will be much easier to search, discover, and purchase.
Of course, the settlement is not without its skeptics, who fear some of the anti-competitive elements of the agreement. Joe Grimmelmann is one such skeptic who has provided a clear, comprehensive and cogent analysis of the settlement for the public at-large, with specific guiding principles and recommendations for the court as they review the settlement. His primary concerns are the Registry’s power to set the conditions for the newly formed digitized book search market, and Google’s “most-favored-nation” status with the Registry (a reference to section 3.8 of the settlement) . His arguments are compelling, and his recommendations would undoubtedly improve the settlement from the standpoint of the consumer.
But Grimmelmann, and other observers like him, have a fundamentally misguided approach to the settlement. The job of the judiciary is not to set policy for the public good, but rather to resolve disagreements under the law. It’s the responsibility of Congress to ensure that the anti-trust standards used by the courts properly weigh the benefits of laissez-faire economics against the rights of consumers. In this case, as Grimmelmann admits, the Registry required by the settlement doesn’t necessarily constitute an anti-trust violation. Of course, there are certain actions it could take that would breach U.S. competition laws, but that’s true of just about any trade association that represents a substantial majority of its industry. Thus, when Judge Sprizzo considers the settlement for the final time at the Fairness Hearing in June, he won’t be considering the anti-trust implications of the settlement, and instead will be ensuring that the agreement is “fair, reasonable, and adequate” for all members of the Class of publishers and authors.
Does this mean our anti-trust system is lacking? Here we have an organization that will wield the rights to negotiate on behalf of almost all authors and publishers that has guaranteed Google that none of its competitors will get a better licensing deal. Sounds like a great position to be in. But let’s not forget what Google had to do to get here. If you tally up the $125 million from the settlement with the cost of digitizing the books in the first place, Google’s initial outlay is hundreds of millions of dollars. Also, by being the first to undertake this audacious effort to digitize books, Google risked being hit with the astronomical statutory damages allowed by copyright law. Perhaps more significant than the monetary risks, was the possibility that the court would take a strict interpretation of the “fair use” doctrine that would have threatened Google’s entire business model. And after all this, no one really knows whether this new system will be profitable. Finally, it’s important to remember that nothing directly prevents the Registry from negotiating the exact same deal with Microsoft or Yahoo.
My point here is this: the settlement is the best thing we could have hoped for under the circumstances. Sure, Google does end up with a privileged position at the end of all this, but I’m pretty happy if this is the most exclusive deal Google can come up with in exchange for putting so much on the line. And while an affirmation that Google’s use of book snippets in search results constitutes fair use would have been great, it’s not clear that Google Books would have ever graduated from the moderately useful book discovery system it is today into the unparalleled massive research database it will be tomorrow.