The Justice Department has opened an antitrust investigation into Google’s settlement with authors and publishers over its Google Book Search service, according to two people briefed on the matter.
Lawyers for the Justice Department have been in conversations in recent weeks with various groups opposed to the settlement, including the Internet Archive and Consumer Watchdog. More recently, Justice Department lawyers notified the parties to the settlement, including Google, and representatives for the Association of American Publishers and the Author’s Guild, that they were investigating various antitrust issues related to the far-reaching agreement.
The investigation does not necessarily mean that the department will oppose the settlement, which is subject to a court review. But it suggests that some of the concerns raised by critics, who say the settlement would unfairly give Google an exclusive license to profit from millions of books, have resonated with the Justice Department.
A spokeswoman for the Justice Department was not immediately available to comment. A spokesman for Google declined to comment. Representatives for the Association of American Publishers and the Author’s Guild could not immediately be reached.
The settlement agreement stems from a class action filed in 2005 by the Author’s Guild and the Association of American Publishers against Google. The suit claimed that Google’s practice of scanning copyrighted books from libraries for use in its Book Search service was a violation of copyrights.
The settlement, which was announced in October, gives Google the rights to display the books online and to profit from them by selling access to individual text and selling subscriptions to its entire digital collections to libraries and other institutions. Revenues would be shared between Google, authors and publishers.
But critics say that Google alone will have a license over millions of so-called “orphan books,” whose authors and right holders are unknown or cannot be found. Some experts believe the orphan works account for the bulk of the collections of some of the major university libraries, that have allowed Google to scan books.
Some librarians fear that with no competition, Google will be free to raise prices. Some scholars have also said that the system for pricing books could raise antitrust concerns.
Separately on Tuesday, U.S. District Court Judge Denny Chin, who is overseeing the settlement, postponed by four months the May 5th deadline for authors to opt-out of the settlement and for other parties to oppose the settlement or file briefs. The decision follows requests by groups of authors and their heirs, including representatives of the estate of John Steinbeck, who argued that authors needed more time to understand the far reaching implications of the complex settlement.
Google, as well as the authors and publishers, have defended the settlement saying it will bring benefits to authors, publishers and the public at large. They said it would renew access to millions of rarely seen out-of-print books from major university libraries, which would now be available in digital form at every public library in America.
If the Justice Department decides to take action against Google, it will not be the first time that the company would find itself in the cross-hairs of federal regulators. Last year, Google abandoned a high-profile advertising partnership with Yahoo after the Justice Department threatened to go to court to block the deal.
The Justice Department and the Federal Trade Commission have wrangled over jurisdiction over the book settlement, and the Justice Department won out, according to a person familiar with the probe.