Google is standing behind its proposed settlement with U.S. authors and publishers over its book search engine.
Antitrust concerns over the proposed agreement have prompted critics to object to it and the U.S. government to seek more information about it.
"The agreement was structured in a way specifically to encourage competition. It's non-exclusive," said Google spokesman Gabriel Stricker on Wednesday.
"The charter of the Book Rights Registry quite explicitly states it will be able to work with other third parties to represent rightsholders who come forward," Stricker said, referring to the independent, nonprofit entity that would distribute payments to copyright holders earned through online access to their works.
In addition, Adam Smith, Google's Book Search Director of Product Management, argued in a blog posting on Wednesday that the proposed settlement will greatly benefit readers by making books, especially hard-to-find, out-of-print ones, more widely and easily available.
But critics have raised various concerns over the settlement between Google and the plaintiffs -- the Authors Guild and the Association of American Publishers (AAP).
Now, the U.S. Department of Justice is getting involved.
An industry source close to the matter confirmed as accurate reports on Tuesday in The New York Times and The Wall Street Journal that the DOJ is seeking information about the proposed settlement.
This person, who asked IDG News Service for anonymity, said that the DOJ in recent weeks approached Google's lawyers and held brief conversations with them.
The DOJ told Google lawyers that it was prompted by concerns raised by critics of the proposed settlement, particularly over the issue of orphan works, which are those for which no one claims ownership, either because the author has died or the publishing house disappeared.
Earlier this month, Consumer Watchdog called on the DOJ to intervene, arguing that the proposed settlement gives Google special protections against lawsuits over orphan works.
"The danger of using such works is that a rights holder will emerge after the book has been exploited and demand substantial infringement penalties. The proposed settlement protects Google from such potentially damaging exposure, but provides no protection for others. This effectively is a barrier for competitors to enter the digital book business," Consumer Watchdog said in a statement.
Google and the DOJ plan to sit down for more talks, the source said, adding that the DOJ is in very early stages of information gathering and hasn't told Google it is launching a formal inquiry. A DOJ spokeswoman declined to comment.
Allan Adler, the AAP's vice president for legal and government affairs, confirmed that the DOJ contacted the AAP this week, but that they haven't met yet.
That the DOJ is interested in understanding a settlement agreement as complex as this one isn't at all surprising, he said. "We anticipated a call from them," Adler told IDG News Service.
The DOJ didn't tell the AAP exactly what portions of the settlement it wants to discuss, but Adler's understanding is that there is no formal inquiry at this point.
Consumer Watchdog also objected to what it considers is a "most favored nation" provision in the settlement towards Google, by preventing the Registry from offering better deals to Google competitors interested in offering access to books online.
Also this month, University of California at Berkeley law professor Pamela Samuelson argued against the settlement, saying it will endanger competition because of its orphan work provisions.
"The Book Search agreement is not really a settlement of a dispute over whether scanning books to index them is fair use. It is a major restructuring of the book industry's future without meaningful government oversight. The market for digitized orphan books could be competitive, but will not be if this settlement is approved as is," Samuelson wrote.
The AAP's Adler said it's not surprising to see objections raised to the settlement, particularly because critics may not fully understand certain provisions and facts, he said.
Once the confusion is clarified, Adler is confident that the objections will subside and that, in the end, the court will approve the settlement.
In the meantime, the U.S. District Court for the Southern District of New York, which will decide whether to approve the settlement or not, this week extended from June to September the period for members of the plaintiff class -- authors, publishers and rights holders in general -- to be notified of the agreement and mull whether to opt out of it.
In the fall of 2005, the Authors Guild and the AAP separately sued Google alleging that Google's wholesale scanning and indexing of in-copyright books without permission amounted to massive copyright violations. Book authors and the Authors Guild filed a class action lawsuit, while five large publishers filed a separate lawsuit as representatives of the AAP's membership.
The lawsuits were brought after Google launched a program to scan and index books from the libraries of major universities without always getting permission from the copyright owners of the books.
Google then made the text of the books searchable on its book search engine, although it argued it was protected by the fair use principle because it only showed snippets of text for in-copyright books it had scanned without permission.
Last October, the Authors Guild and the AAP hammered out a wide-ranging settlement agreement that calls for Google to pay US$125 million and in exchange gives the search giant rights to display chunks of these in-copyright books, not just snippets.
In addition, Google will make it possible for people to buy online access to these books. The agreement will also allow institutions to buy subscriptions to books and make them available to their constituents.
A royalty system will also be set up to compensate authors and publishers for access to their works via the creation of the Registry. Revenue will come from institutional subscriptions, book sales and ad-revenue sharing.
This Registry, whose board of directors will be made up of an equal number of author and publisher representatives, will also locate and register copyright owners, who in turn have the option to request to be included in or excluded from the project.
A big portion of Google's $125 million payment will go towards funding the Registry, while the rest will be used to settle existing claims by authors and publishers and to cover legal fees.
The Authors Guild declined to comment for this article.