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.
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Filed Under: book scanning, book search, copyright, culture, settlements
Companies: google

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  1. identicon
    LostSailor, 12 Feb 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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