Google and the copyright owners suing it over Google Book Search have announced a proposed settlement. If you own a copyright in a book, congratulations: you’re about to be part of a complicated royalty-collecting system. The settlement draft is 141 pages long (not counting attachments A through M), and I’m still working my way through it, but I wanted to get up one very important first reaction:
This is a Google-only deal.
The result of the settlement will be to give Google a license to keep on doing what it’s doing, while allowing the authors to use their now-sharpened knives to sue anyone else who tries to do the same. At that point, of course, Google would be delighted for the authors to succeed, since it keeps the competition at bay. The settlement may also be bad for other search engines in another respect: the authors will claim that it undermines any claim of fair use in indexing books and making them searchable. Look, they’ll say, Google struck a deal to pay for its uses. That proves there’s a functioning market for these rights, and you should have to pay up, too. I happen to disagree, and this brings me to my second reaction:
You can’t strike a deal like this without court approval.
That matters, because even if this settlement is approved, there is still no functioning “market” for these uses of copyrighted works. The issue is that this is a class-action settlement requiring judicial approval to bind all authors. It’s practically impossible for anyone else to take advantage of Google’s terms without filing suit to obtain a similar class-binding order. Individual license negotiation — the route that Google considered and rejected when it started the project — is utterly infeasible. Since voluntary negotiation can’t produce the result one needs to do comprehensive indexing, there’s still no market for it, and this settlement therefore shouldn’t prejudice future fair use claims by search engines.
In addition, there’s an antitrust issue with the proposed settlement. Via the mechanism of class certification, Google has now negotiated a collective license with all authors. This can be read as price-fixing among the authors (who’ve agreed on royalty rates to charge Google) or as the practical equivalent of an exclusive-supply arrangement used by Google to exclude competitors. Again, the court’s role in approving a settlement binding on all authors makes both of these concerns more worrying. We’re witnessing the creation of a new ASCAP — and there’s a reason that the original lives under an antitrust consent decree.
It’s urgent that these concerns be placed in front of the court. I would argue that a necessary first step would be modifying the proposed settlement to offer any search engine equal ability to participate on the same terms as Google, with no prejudice to their ability to negotiate better terms if they can. Other modifications to prevent adverse fair use and antitrust consequences may also be necessary.