Increasing Concerns Raised Over Google's Book Search Settlement

from the a-bad-deal-for-everyone dept

When the settlement between Google and authors and publishers, over Google's book scanning project, was announced, many saw it as a big victory for everyone -- as it allowed Google to continue moving forward with plans to scan books, while also creating a "business model" for authors and publishers. However, some of us were very troubled by the implications of the settlement. It seemed clear to us that Google had a strong argument for why its actions were perfectly legal. Settling did a number of dangerous things. It failed to clear up the legal issue at all (effectively making it cost prohibitive for anyone else to work on a similar project). It set in permanent place a business model which seemed hugely bureaucratic and inefficient. That business model is basically set in stone and set by the terms of this agreement, rather than any real market mechanism. Finally, it signaled (loudly) to the world that Google was plenty willing to pay a few million dollars to settle with opponents, even when it had a strong legal position, knowing that it would make life more difficult for competitors.

It appears that as the details have come out, more and more people are troubled by what the settlement actually will mean in the long run. Robert Darnton, the head of the Harvard library system (which had already complained about the settlement) has written a thoughtful piece, detailing his worries about how this creates an effective monopoly, and the many, many downsides that this causes.

Prior to this settlement, we had been one of the bigger defenders of Google's book scanning program against those who worried that it was creating a de facto monopoly. That's because there were no exclusive agreements. However, with the new settlement, while again others could enter in theory, Google has effectively priced the rest of the market out. Prior to this, there was a reasonable argument to be made that anyone could scan books and create an index, so long as they weren't displaying too much of the books. Now... Google has set a market price of $115 million, plus a set-in-stone business model, as the entry price. It's pocket change to Google, but it's a big barrier to others.

This is definitely raising concerns from a variety of other sources, who were at least cautiously optimistic when the deal was announced. The EFF now points us to James Grimmelmann's worries about the deal (pdf). While Grimmelmann does support the deal and say it will be net positive for society, he then goes through a pretty detailed list of problems with the deal, almost all of which go back to the idea that this deal gives Google effective monopoly power over digitized books.

Finally, as for my initial fear that this would signal something of an "open season" on Google, with demanding money from Google for Google daring to provide the service of helping others find their works, we're already seeing some of that in the early stages. Some in the newspaper business are using the book settlement as a template for how Google should pay them too.

In the long run, I think Google is going to regret this deal. Yes, in the short term it handed Google a monopoly and removed a distracting lawsuit from the table. But, it did some very dangerous things that will harm Google in the long term. It signalled Google's willingness to pay up even when it shouldn't have to. It set in stone a business model way before anyone knows what the best business model is for online books. And, finally, in knocking all competitors out of the market, Google has taken away its own best incentive to continue innovating and serving customers at the best of their ability in the book search realm. The end result may be a worse product that isn't nearly as useful (and revenue generating for Google) as it would have been if it had real competition in the market.


Reader Comments (rss)

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  1.  
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    TasMot, Feb 11th, 2009 @ 2:27pm

    What is set in stone?

    I think the one assumption your article makes that is incorrect is that this sets the business model in stone. If indeed Google had every legal right to do what it was doing, then this agreement has changed nothing. It may make for some LOUD position taking of "see Google paid us". But in reality, if another group has enough money to start a scanning project and believes that they have the legal right to do it, then they can just go ahead knowing that there is a lawsuit coming (just like Google did). Google's agreement does not set a legal precedent, just bragging rights.

    It is still going to be problematic for Google since the sharks are circling for their share, but that is there mistake, or maybe that the reality is that it was still cheaper for them to settle and avoid an injunction and long legal battle to get moving on the real work of the scanning.

     

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  2.  
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    Anonymous Coward, Feb 11th, 2009 @ 3:00pm

    test

     

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  3.  
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    Anonymous Coward, Feb 11th, 2009 @ 3:07pm

    Given the scope of the project, the sheer size of it is enough to keep most everyone else out - due to the cost in dollars and the time and manpower involved. Google has the money to do things just for the sake of mankind, or acting as if it just for the sake of mankind. Not too many other businesses out there that would want that project.

     

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  4.  
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    Kevin Donovan, Feb 11th, 2009 @ 3:09pm

    Monopoly?

    I, too, have big reservations from a public-interest point of view, but as for monopoly... Amazon is making giant strides in providing a competitor for digital books.

     

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  5.  
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    LostSailor, Feb 11th, 2009 @ 3:12pm

    There are other underlying issues

    First, it's not Google's responsibility to litigate in anyone's interest other than Google's. You seem to think it is in Google's interest to "settle a legal issue" but Google apparently thought differently.

    It is not clear at all that Google had the legal right to scan and make available copies of in-copyright books, which were provided by several large library systems. Part of the original project called for Google to return electronic copies to the libraries, but while the libraries might have been able to make copies for archive purposes, it's not clear at all that they would have the right to make them generally available to their students or faculty.

    Publishers aren't about to sue the libraries unless there is no alternative, and Google was the first target. Google may or may not have had the right to scan these books, but whether it could then make use of the books by presenting even portions of them online was an open question. The settlement gives Google far greater rights in being able to present that content online and helps the libraries (somewhat) with what they can do with their copies.

    Couple this with the fact that Google had been courting publishers to voluntarily participate in the Book Project by providing copies of newly published books and allowing "search within the book" and display of some content, it's clear they valued cooperation with publishers over fighting with them (which you seem to advocate).

    All in all, it seems a good deal for Google; they're free to continue to innovate (and there's little reason to think that they "need" market pressure to do so) and they can continue on with their business, rather than focusing on potentially damaging lawsuits. Yes, others may seek similar settlements, but if the publishers (and authors guild) were successful in their lawsuit, others would have surely followed. It make business sense to settle up front and get on with business than settle later after you've potentially wasted time and money on lawyers.

    It's easy to call for someone else to bear the burden and costs of litigation for what you perceive as a greater public good when it's not your business.

     

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  6.  
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    Jim Dandy, Feb 11th, 2009 @ 6:39pm

    Re: You're an idiot

    Why people like Anonymous Coward think that Google is some philanthropic organization is beyone me. They are a for profit organization who's actions are driven by the expected financial return of such actions. 1000's of other businesses want this project, but dim-witted university presidents were impressed by colorful "GOOGLE" letters and purchased the emporer's new cloths.

     

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  7.  
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    lubomir, Feb 11th, 2009 @ 7:10pm

    dandy

    Jim dandy as a matter of fact you are the idiot.

     

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  8.  
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    Mike (profile), Feb 12th, 2009 @ 1:28am

    Re: There are other underlying issues

    First, it's not Google's responsibility to litigate in anyone's interest other than Google's.

    I never said any such thing. In fact, I've said the opposite. But I also explain why I don't believe this is in Google's best interest (you did read the post, right?)

    You seem to think it is in Google's interest to "settle a legal issue" but Google apparently thought differently.

    Well, duh. Doesn't mean I can't explain why I think they're wrong, right?


    It's easy to call for someone else to bear the burden and costs of litigation for what you perceive as a greater public good when it's not your business.


    Honestly. I did not say that Google needed to do what was in the public's best interest. But I did explain why this is a bad deal for Google.

     

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  9.  
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    DoxAvg, Feb 12th, 2009 @ 4:12am

    Monopolies bring state-backed value, and that's bad

    Patents and copyrights provide state-backed monopolies to increase the value and thus the incentive to create new and novel works; so goes the initial justification. Congress is responsible to the people and checked by the executive and legislative branches, which keeps them from creating legislative abuses of those state-backed monopolies [see "Theory and Practice, differences"].

    What concerns me is that some extra-legislative organizations, the Author's Guild and the Association of American Publishers , has unilaterally decided to give Google this de facto monopoly. They (literally) absolutely have the right to make any deals they want about their copyrights, but there is a subtle lie that is become more and more common with "representative organizations" such as the AAP and the RIAA: because we represent a substantial portion of the market, we can make collective deals for the entire market.

    If Google sweeps up my out-of-print or share-alike licensed book in their automated scanfests, for every copy they sell, the AAP gets paid as a result of the monopoly, not me. And because they have a been granted the de facto monopoly on the scanned books, they will be able to charge monopolistic prices. Until I assert my rights with Google, the AAP gets paid for my work.

    I think the biggest loss from this whole deal is the widening of the gap between the all-progress-is-through-monitezation camp and the free-culture-whacknut camp. There was a good argument that the vast majority of copyrighted work was rotting on shelves, untouchable, because of the Sony Bono Act its ilk. Now, there is a monopolized incentive for Google to bring that marginal value from zero to [something slightly larger than zero], and the copyright eternalists can point and say "no, those should no go into the public domain; Google is actively making money off of them and making sure that everyone can have access (for a price)." I think this deal is the end of any chance of copyright ever expiring. When the Sony Bono Dark Age is in danger of coming to a close, Disney and Google will both be standing at Congress's doorstep with many well-funded arguments that if we were to let copyright expire any less than 150 years after the author's death, none of those dead authors will ever make anything again.

     

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  10.  
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    Valkor, Feb 12th, 2009 @ 4:36am

    Re: Re: You're an idiot

    One of Google's mottoes is "Don't be evil." Before they became a publicly traded company, that appeared to be an actual guiding philosophy. Now that they are public, they have been behaving in ways that resemble standard business as usual, such as in the case of censorship in China.

    Google built a reputation for doing things that weren't specifically part of a quarterly business plan, like their Summer of Code projects. That's one of the reasons why people trust Google with their E-mail, browsing histories, and simply astonishing amounts of information.

    When Google appears to pursue short term financial gain at the expense of their perceived principles, people lose their trust, and it's been pointed out on this blog that reputation is a scarce resource.

    The point is that if Google is guided by the "philanthropic" ideals they were founded on, not only will people give them loyalty, but Google doesn't have to worry every thumbnail and headline owner using this book scan buyoff to bite them in the ass.

     

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  11.  
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    LostSailor, Feb 12th, 2009 @ 8:33am

    Re: Re: There are other underlying issues

    Yes, Mike, I read the post. I'll grant you that in this post you never explicitly state that Google has a responsibility to litigate this case for the greater public good, but you certainly dance around the concept in ways that very clearly imply that Google should have done exactly that. "Settling did a number of dangerous things. It failed to clear up the legal issue at all ..." That's not necessarily dangerous to Google at all, especially since there were strong arguments against what Google could do in scanning and what could be done with the resulting digital files.

    Back in November, you wrote:

    Obviously, as a business concern, this [settlement] is Google's right -- and some may even say that it's Google's responsibility to its shareholders to do such a thing. I would disagree, simply because, in the long term, by settling these lawsuits, rather than helping to establish what the law says, Google merely invites more lawsuits from more companies hoping to "settle up" as well. Plus, without the law being clear, it creates uncertainty and inefficiency in the market, and that's not good for anyone -- including Google.


    Here you are implying that Google has a responsibility to not only it's shareholders, but also the public good (you've used the phrase "Silicon Valley's defender" and lament that Google seems to have abandoned that role).

    Well, duh. Doesn't mean I can't explain why I think they're wrong, right?

    Of course you can explain your views...I assume it's one of the primary purposes of this blog. Doesn't mean I can't point out where your views are wrong, either, right?

    Honestly. I did not say that Google needed to do what was in the public's best interest. But I did explain why this is a bad deal for Google.

    But your several posts on this topic have clearly implied that Google should do just that (as well as that what's good for the public is "good for Google"). But this is not a bad deal for Google at all, as I've tried to point out (you seem to jump over those parts): it allows Google to proceed with the project without legal concern and it allows Google much wider latitude in what it can actually do with the digital files (far beyond any fair use display of small parts of content) that will make money for Google.

    If it sets any precedent at all, it is that there is a mechanism by which Google can proceed with innovative business plans without protracted litigation, since content owners can suggest similar mechanisms.

    If that raises the bar for competitors to proceed with similar projects (and, frankly, there are very few competitors that could even hope to match what Google is doing), that's not a bad thing at all for Google.

     

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  12.  
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    Mike (profile), Feb 12th, 2009 @ 10:04am

    Re: Re: Re: There are other underlying issues

    Here you are implying that Google has a responsibility to not only it's shareholders, but also the public good (you've used the phrase "Silicon Valley's defender" and lament that Google seems to have abandoned that role).

    Not at all. I said that what I thought was unfortunate was that many people *TREATED* Google as if it were Silicon Valley's defender, when they should not have done so.

    If that raises the bar for competitors to proceed with similar projects (and, frankly, there are very few competitors that could even hope to match what Google is doing), that's not a bad thing at all for Google.

    As I said, there are so many additional consequences of this, Google will most certainly regret this deal. It sets them up to do other deals, and makes content creators think that Google owes them. Their lawyers are not going to be happy.

     

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  13.  
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    LostSailor, Feb 12th, 2009 @ 11:34am

    Re: Re: Re: Re: There are other underlying issues

    As I said, there are so many additional consequences of this, Google will most certainly regret this deal. It sets them up to do other deals, and makes content creators think that Google owes them. Their lawyers are not going to be happy.

    Do you honestly think that Google's litigation team, in-house counsel, and executive management did not carefully take into account the future impact the settlement might have regarding other content creators before agreeing to the settlement? Do you honestly think you've come up with considerations that they didn't? No, I doubt that Google will regret anything about the settlement. If anything, publishers, authors, and libraries might have more regrets. And if your dire predictions come to pass, I imaging their lawyers will be delighted being employed on future litigation.

    But as I've noted elsewhere, the settlement does not create a precedence as such. If these issues are so important and Google's original arguments are so strong, anyone can start up a scanning and indexing system for in-copyright books and invite the same litigation. This settlement is not binding on anyone but Google.

     

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  14.  
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    nasch, Feb 13th, 2009 @ 8:10am

    Re: What is set in stone?

    if another group has enough money to start a scanning project...

    You mean enough money to fight a protracted legal battle, right?

     

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