Competitors and potential entrants in the e-book market have raised antitrust objections to a proposed settlement of a massive copyright dispute between Google, Inc.; the Authors Guild; and the American Association of Publishers. The objectors assert that the settlement would create high barriers to entry and would allow the parties to dominate the developing market for electronic books. More than a dozen parties filed objections to the proposed settlement, including competitors, academics, authors and foreign governments. The proposed settlement would end two different actions brought by publishers against Google in 2005. In those actions, the plaintiffs alleged that Google’s plan to digitize book titles and make them searchable and readable online violated U.S. copyright law. Under the proposed settlement, Google would pay the two publishing organizations $125 million to resolve the claims and establish a registry that would allow authors and other rights-holders in the books to register their works in order to receive payment for online use of their titles. Google would automatically receive a license to any work published after 1923 for which no rights-holder claimed a copyright. The deadline for third party objections was September 10.
Competitors and potential competitors in the e-book market, such as Amazon.com and Yahoo!, Inc., filed objections with the court and argued that Google essentially will receive a “quasi-exclusive” license to so-called “orphan” works—titles for which no one has ever claimed a copyright. These companies argue that this license to Google would create a high barrier to entry to any potential competitor. In addition, opponents assert that the settlement would create a powerful “consortium” between Google and the publishing organizations that would enable the parties to set the price of digital books. Both the European Commission and the U.S. government have raised concerns with the settlement as well. The Department of Justice Antitrust Division has been investigating the competitive effects of the settlement since April, and Marybeth Peters, the U.S. Register of Copyrights, has objected to the settlement. This is the latest example of the application of antitrust and competition law to large aggregations of content by single players on the Internet. Judge Denny Chin of the Southern District of New York is expected to hold a hearing to discuss the fairness of the settlement on October 7.