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Court Urged to Reject Google Deal
Justice Dept. Cites Possible Copyright, Antitrust Violations

By Cecilia Kang
Washington Post Staff Writer
Saturday, September 19, 2009

The Justice Department urged a federal court on Friday to reject Google's disputed settlement with book authors and publishers, citing concerns that the deal to create the world's largest digital library could violate copyright and antitrust laws.

The department's antitrust division said in a statement it agreed with criticism that the deal, as currently constructed, could potentially lead to copyright infringements and may give Google an unfair advantage in the fast-growing digital book market.

The department said the court should not accept the agreement unless Google, the Authors Guild and the Association of American Publishers make changes to address the government's concerns. The Justice Department statement, posted late Friday night, acknowledged that a "properly structured settlement agreement in this case offers the potential for important societal benefits."

In a statement, Google said: "We are considering the points raised by the Department and look forward to addressing them as the court proceedings continue."

A Justice Department official, who spoke on the condition of anonymity because the investigation is ongoing, said talks this week with parties involved in the agreement were "very constructive. They are motivated to come up with modifications that might address concerns we raised."

Specifically, the Justice Department suggested limiting the provisions for future licensing, a part of the settlement that some critics said would give Google dominant power over the licensing of digital titles. The agency also recommended adding more protections for the holders of rights to little-known books and eliminating the joint pricing deal between publishers and authors.

The Justice Department said that "whatever the settlement's ultimate scope," it should "provide some mechanism by which Google's competitors can gain comparable access."

The $125 million settlement with authors and publishers is a crucial step in Google's effort to create a huge online library featuring millions of digitized books, including many rare titles. The search giant has argued that the digital archive would help expand research and open access to learning, particularly for the physically or financially disadvantaged.

The deal is being reviewed by the U.S. District Court of the Southern District of New York. It has set a hearing on Oct. 7 to review whether the deal is anticompetitive or harmful for consumers.

Critics of the agreement, including consumer groups and competitors Amazon and Microsoft, argue that it would give Google near exclusive licensing rights to millions of out-of-print books, potentially harming consumers by giving the company exclusive control over prices for digital books.

"A single entity cannot be allowed to build a digital library based on a monopolistic advantage," said John M. Simpson, a consumer advocate with public interest group Consumer Watchdog.

The U.S. Copyright Office last week criticized the settlement. At a congressional hearing, Marybeth Peters, register of the office, told lawmakers that the deal threatens to "create mechanisms by which Google could continue to scan with impunity, well into the future, and to our great surprise, create yet additional commercial products without the prior consent of rights holders."

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