GBS: Update to Eric Fraser on Antitrust

Eric Fraser’s paper on the antitrust issues raised by the settlement, Antitrust and the Google Books Settlement:
The Problem of Simultaneity
, has gone from draft to published. It appears in the most recent issue of the Stanford Technology Law Review, and has been updated to address the amended settlement. Here is the abstract of the published version:

Google Books represents the latest attempt at the centuries-old goal to build a universal library. In 2004, Google started scanning books from libraries around the world. Although it made copyright licensing agreements with some publishers, it did not obtain permission from each rightsholder before scanning, indexing, and displaying portions of books from the stacks of libraries. Unsurprisingly, authors and publishers sued for copyright violations. Google settled the class action lawsuit in a sweeping agreement that has raised suspicion from librarians, users, and the government. In this paper, I analyze the antitrust and competition issues in the original and amended settlement agreements. I find that the simultaneous aspects of agreements and pricing pose serious antitrust problems. The settlement effectively gives Google simultaneous agreements with virtually all the rightsholders to in-copyright American books. The original agreement also would have required Google to set prices for books simultaneously. In a competitive market, both agreements and pricing would occur independently. Under current law, however, no potential competitor can make agreements with the rightsholders to orphan works. The simultaneity, therefore, concentrates pricing power, leading to cartel pricing (a problem under § 1 of the Sherman Act) and monopolization (a § 2 problem).

In Australia the settlement would have problems with monopoly restrictions of terms of trade of unrelated third parties, (and it might even be seen as possibly a criminal law matter.)