Google wants to delay a hearing on its controversial digital books settlement so it can modify the deal to satisfy antitrust regulators, according to a motion filed Tuesday.
A hearing was scheduled for Oct. 7 before Judge Denny Chin in New York to approve a $125 million settlement with authors and publishers that would allow Google to digitize millions of books. But the deal has come under intense scrutiny from the Department of Justice, which filed a stinging opposition to the settlement on Friday because of antitrust concerns.
Tuesday's motion to delay the hearing (.pdf) was filed by the authors and publishers and agreed to by Google.
"The parties intend to amend the settlement agreement and need adequate time to negotiate amendments among themselves and with the DOJ," wrote Michael Boni, a partner at Pennsylvania's Boni & Zack, who represents The Authors Guild.
An avalanche of opposition has fallen on the deal since it was struck in 2008 to settle copyright claims made by authors and publishers against Google's book-scanning project. Critics say it would give Google monopoly power over digital books, especially "orphan works," where the copyright owner can't be found. Competitors argue that Google's immunity from potential copyright claims would be a significant barrier to entry into the digital books market. The final blow came on Friday when the Justice Department offered a rebuke in court papers.
"The breadth of the proposed settlement -- especially the forward-looking business arrangements it seeks to create -- raises significant legal concerns," wrote the Justice lawyers, including William Cavanaugh Jr. of the antitrust division and Manhattan Assistant U.S. Attorney John Clopper. "This court should reject the proposed settlement in its current form and encourage the parties to continue negotiations to modify it so as to comply with [class action law] and the copyright and antitrust laws."
DOJ's antitrust lawyers have been probing the deal -- and also talking with Google and the authors and publishers about making revisions. Friday's filing suggests that the outcome of that continuing investigation depends on whether, and to what degree, the parties address the government's concerns -- which, according to the brief, include the power book publishers have under the settlement to restrict price competition and the inability of Google's competitors to obtain comparable rights from the authors and publishers. It's not reasonable, Justice argues, to expect Google's rivals to mount their own book-scanning operations without permission in the hope of prompting a class action that could be settled on terms similar to those in the Google agreement. "It would scarcely be sound policy to encourage deliberate copyright violations and additional litigation," the brief says.
According to Justice, an online book deal can work -- but only with the changes it's demanding. "A properly constructed settlement," the Justice Department filing says, "has the potential to breathe life into millions of works that are now effectively off-limits to the public."
Google is represented by Daralyn Durie of San Francisco's Durie Tangri.