At Congressional Hearing, Register of Copyrights Slams Google Settlement

Google says it will open up retail market for out-of-print books

Norman Oder -- Library Journal, 09/10/2009

• Peters: settlement "at odds with the law"
• Law professor praises product but calls it a "beta"
• Google testimony makes slight mention of libraries

At a Congressional hearing today on the Google Book Search Settlement, Marybeth Peters, Register of Copyrights, U.S. Copyright Office, testified forcefully, warning that key parts of the settlement “are fundamentally at odds with the law,” creating a compulsory license for Google that should be the domain of Congress, not the courts.

The settlement, she told the House Judiciary Committee, would “turn copyright on its head” and undermine Congress’s efforts at orphan works legislation. She also warned about “serious international implications,” given the objections by foreign governments and rightsholders. A hearing in federal court in New York is scheduled for October 7 and LJ sister publication Publishers Weekly suggests that "Peters’s testimony stands as a disastrous development for the settlement parties."

Also objecting to the settlement were representatives from Amazon.com and Consumer Watchdog, while representatives from Google and the Authors Guild spoke in favor of it. Dueling antitrust experts appeared as well, with University of Chicago law professor Randal Picker saying he applauded the project, but said it was a “beta” that needed improvement.

No library representatives appeared, though they did submit written testimony.The hearing was adjourned at about 1:15 pm.

Committee reaction
Committee members were more inquisitive than conclusory, though Rep. Zoe Lofgren, a Democrat who represents Silicon Valley, suggested that Congress should stay away. “At this point, we don’t have a role to play,” she said, adding that the settlement was “the private sector achieving what we failed to achieve” in terms of legislation to license orphan works—in-copyright books whose rightsholders can’t be found. 

Rep. Sheila Jackson Lee, a Democrat from Texas, however, suggested that Congress had opportunities to be both "proactive" and "responsible." Also, Rep. Hank Johnson, a Democrat from Georgia, suggested that the settlement was a "classic case of legislating from the bench."

Google announcement
Saying that “the orphan works problem is being exaggerated," Google chief legal counsel David Drummond announced a new policy, one seemingly aimed at concerned book retailers, not libraries.

In a statement issued by Google, he said, "We believe strongly in an open and competitive market for digital books. As part of that commitment, today we announced that for the out-of-print books being made available through the Google Books settlement, we will let any book retailer sell access to those books. Google will host the digital books online, and retailers such as Amazon, Barnes & Noble or your local bookstore will be able to sell access to users on any Internet-connected device they choose. Retailers can also pursue their own digitization efforts of out-of-print books in parallel."

In his public testimony, Drummond explained that Google would divide part of its 37% revenue share—which was negotiated in the settlement—with the booksellers.

More from Peters
At a conference in March on the settlement, Peters said she’d recommended against the Library of Congress participating in Google’s initial Library Partners program, because she wasn’t sure that Google’s indexing of copyrighted books was a fair use—and that no one from Congress has asked the Copyright Office to comment on the settlement. 

Now Congress did ask. In her written testimony today, Peters said that an initial positive response to the settlement by the Copyright Office was replaced by dismay: “For example, the settlement allows Google to reproduce, display and distribute the books of copyright owners without prior consent, provided Google and the plaintiffs deem the works to be 'out-of-print' through a definition negotiated by them for purposes of the settlement documents. Although Google is a commercial entity, acting for a primary purpose of commercial gain, the settlement absolves Google of the need to search for the rights holders or obtain their prior consent and provides a complete release from liability.”

She added, “In the view of the Copyright Office, the settlement proposed by the parties would encroach on responsibility for copyright policy that traditionally has been the domain of Congress. The settlement is not merely a compromise of existing claims, or an agreement to compensate past copying and snippet display. Rather, it could affect the exclusive rights of millions of copyright owners, in the United States and abroad, with respect to their abilities to control new products and new markets, for years and years to come. We are greatly concerned by the parties’ end run around legislative process and prerogatives, and we submit that this Committee should be equally concerned.”

Peters did acknowledge positive developments: the creation of a rights registry for book authors, publishers and potential licensees; increased accessibility to those with print disabilities; and increased ability of libraries to offer on-line access to books and other copyrighted works.

“However, none of these possibilities should require Google to have immediate, unfettered, and risk-free access to the copyrighted works of other people,” she said. “They are not a reason to throw out fundamental copyright principles; they are a pretext to do so.”

Google testimony
In his testimony, Google’s Drummond gave brief acknowledgment to the role of libraries and academic institutions, without a response to questions about pricing and privacy.

“Expanded access to these vast collections will serve as an important equalizer," he said. "Historically black colleges and community colleges are eager to attract faculty and students and level the playing field with larger institutions. The institutional subscription will be priced to assure a market rate for the rightsholder and broad access by the public. Under the settlement, public libraries and non-profit higher education institutions can obtain free access to the institutional database at one on-site computer.”

Also, without acknowledging that scholarly rightsholders have expressed different priorities about pricing than the commercial authors represented by the Authors Guild, Drummond claimed that “Many scholars and librarians support our work as complementary to their efforts to make books accessible in an increasingly digital society.”

Amazon testimony
Paul Misener Vice President, Global Public Policy at Amazon.com, focused on two objections. 

“First, the proposal would create a cartel of rightsholders that, for sales of books to consumers, would set prices to maximize revenues to cartel members," he said. "This cartel, called the Book Rights Registry, could never have been established in the ordinary course of business."

"Making matters much worse, in the proposed settlement's second fatal flaw, Google would get a privileged, exclusive deal, despite lip service to non-exclusivity," he continued. "As a result of these flaws, the proposed settlement would seriously harm individual book consumers and most libraries and schools because the rightsholders cartel and Google monopoly inevitably would set higher prices or provide worse service than would be available in a competitive market.”

Contact the author: noder@reedbusiness.com

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