February 11 – February 18, 2010 Edition

Justice Department Urges Restructuring of Google Settlement

WASHINGTON/AUTHORLINK NEWS/02/11/10–The U. S. Department of Justice (DOJ) said in a 26-page legal brief filed last week that many of the initially identified problems in the Google settlement between authors and publishers remain unresolved in the amended document. A fairness hearing is scheduled February 18 in Judge Jimmy Chin’s U.S. District Court of New York, however some sources say the DOJ will encourage Chin not to approve the settlement at this time.

The DOJ said many previously identified problems have not been eliminated, “despite the commendable efforts of the parties to improve upon the initial proposed settlement,” and that Google, the Authors Guild and Association of American Publishers are still trying to reach too broadly with their class-action settlement.

According to a Wall Street Journal report, the DOJ said the revised settlement “suffers from the same core problem as the original agreement: it is an attempt to use the class action mechanism to implement

forward-looking business arrangements that go far beyond the dispute … in this litigation.”

Opponents of the deal, including Inc. and Microsoft Corp., have filed comments with Judge Chin arguing that the settlement would give Google a monopoly in digital books.

Google, the Guild and AAP Google are not expected to modify the settlement until Judge Chin directs them to do so. However, insiders are saying the DOJ is urging Judge Chin not to approve the agreement in its present form, and to encourage all parties to continue talks.

After the Guild and AAP attempted to block Google from illegally scanning books and making them searchable online, the search giant agreed in 2008 to pay $125 million to establish the Book Rights Registry at which authors and publishers could register their works and get paid when their titles are viewed online.

The parties submitted a revised settlement in November 2009 that attempted to address initial concerns of the Justice Department and other critics. The new agreement adds more pricing options to avoid potential price-fixing, and attempts to clarify what digital book services Google can offer.

The Department of Justice also said it was open to working with the parties and other stakeholders on legislative or market-based approaches through which copyright holders could allow Google and others to make digital use of their works, The Journal reported.