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
    TasMot, 11 Feb 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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