Google in The Economist

["Okerson, Ann" <ann.okerson@yale.edu>]

No doubt many readers are following the process and content of 
the Google Settlement on various lists and newsfeeds.  This one 
came across my desk from a source that hasn't yet been widely 
quoted and it seems of some interest -- not the least because 
of the many opposed voices.  Cordially, Ann Okerson/Yale Library


*******

The internet giant's plan to create a vast digital library should 
be given a green light

TO ITS opponents, it is a brazen attempt by a crafty monopolist 
to lock up some of the world's most valuable intellectual 
property. To its fans, it is a laudable effort by a publicly 
minded company to unlock a treasure trove of hidden knowledge. 
Next month an American court will hold a hearing on an agreement, 
signed last year by Google and representatives of authors and 
publishers, to make millions of books in America searchable 
online. The case has stirred up passions, conflict and conspiracy 
theories worthy of a literary blockbuster.

That is hardly surprising. The proposed agreement, which settles 
a class-action lawsuit brought against Google and requires the 
court's approval, represents a novel experiment in transferring 
words -- and an entire business model -- from the printed page to 
the digital realm. If the agreement survives judicial scrutiny it 
could become a model for the management of digital-book rights in 
other parts of the world. That is why the European Commission 
plans to hold its own hearing on September 7th to examine the 
deal's iimplications. Google's actions have already been the 
subject of pointed criticism in Japan, Germany and France, where 
some publishers and writers reckon it will damage their 
commercial interests.

Under the agreement's terms, Google will be free to digitise most 
books published in America, including those that are out of 
print. It will then make chunks of text available through its 
search engine, sell individual e-books, and offer libraries and 
other institutions subscriptions to its entire database. Google 
will keep 37% of the resulting revenue and give the rest to a new 
book-rights registry which will pay copyright holders. Publishers 
and authors had until September 4th to withdraw from the 
agreement; those remaining in it can ask Google to remove their 
titles from its library at any time.

Even critics recognise that the proposed deal offers huge public 
benefits. By helping to resolve the legal status of many texts 
subject to absurdly long copyright periods and murky ownership, 
it will make millions of books more accessible than ever before. 
Researchers from Manhattan to Mumbai will gain instant access to 
volumes that would otherwise languish in obscurity. Libraries 
will be able to offer users access to information far beyond 
their physical book stacks. And authors and publishers will be 
able to cash in on long-neglected works.

But critics maintain that the risks outweigh the benefits. They 
claim it gives Google a dangerous monopoly over digital sales of 
certain books. And they argue that Google and the registry could 
act as a cartel and raise the cost of institutional subscriptions 
to outrageous levels.

Lost and found

The first fear is overdone. True, the agreement gives Google the 
exclusive right to scan "orphan" texts -- titles for which the 
copyright owner's identity or location is unknown. But these 
books are a relatively small part of the market, and most are 
unlikely to be of much value. If any are, their appearance in 
Google's archives is likely to bring long-lost copyright owners 
out of the woodwork to claim the proceeds. They can then sell the 
digital rights to their books to firms other than Google, 
increasing competition.

The critics' second charge is more worrying. In effect, the 
agreement creates a legally sanctioned cartel for digital-book 
rights that could artificially inflate the price of library 
subscriptions. In some other areas, such as the music industry, 
such copyright registries are required to sign formal pledges 
that they will not abuse their dominant positions in this way. 
The Google agreement contains no such promise.

Yet that is not a reason to reject it. After all, Google has a 
big economic incentive to ensure that its online library is 
widely available: it makes most of its money from search 
advertising, so the more people that use its services, including 
the online book archive, the better. It also has a legal 
incentive to watch its step. The agreement stipulates that 
institutional subscription prices must be low enough to ensure 
that the public has "broad access" to digital books, while at the 
same time earning market rates for copyright owners. So if lots 
of libraries refuse to sign up for Google's service because it is 
too costly, the company could be slapped with a lawsuit.

Admittedly, such safeguards are not watertight and other 
antitrust concerns could surface over time in this brave new 
digital world. But the theoretical dangers these pose should be 
weighed against the very real and substantial benefits that a 
comprehensive digital library will create. That is why the court 
should approve the Google agreement, while at the same time 
giving stern warning to its signatories that they will be subject 
to intense regulatory scrutiny for the foreseeable future. If the 
court rejects the deal, much potentially useful information will 
remain, quite literally, a closed book.

Copyright 2009 The Economist

--end--