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What The Collapse Of The Google Books Deal Really Means

25 March 2011

A federal judge entered a final decision on a lawsuit by authors and publishers against Google protesting Google’s scanning of books still under copyright into Google Books. Basically, Google had settled a class-action suit by setting up a book registry to allocate royalties among copyright owners depending upon how many people viewed them through Google and other factors.

The class action made it possible for Google to settle with all authors and publishers as a group. Unfortunately for Google, Judge Chin ruled that a class action wasn’t appropriate, so, in order to display books still under copyright, Google would have to negotiate with each copyright holder individually – effectively an impossible situation.

Google hasn’t said whether it will appeal or not.

Public domain books – those books whose copyrights have expired – are not affected and will still be available in Google Books.

Paid Content has a detailed analysis.


Ultimately, the settlement failed because it was too ambitious. Yes, Judge Denny Chin didn’t like a variety of things about the way Google executed the project, but in the end that was secondary. This was just too big for a class-action settlement. The settlement created a books registry and arranged specific revenue splits; it created methods for dealing with “orphan works,” a longstanding copyright problem that, as Chin noted, should be dealt with by Congress. All those things go far beyond simply ending a dispute. The proposed settlement was without precedent in its scope. The settlement had the potential to change the way we all interact with books—to actually change human culture. A class-action settlement just wasn’t the right tool for that serious work. Even for strong supporters of the Google Books project, it’s hard to argue with that logic.

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Who are the winners and losers here? For the modern e-book market, it’s really status quo. It’s hard to see anyone coming out ahead because this deal fell through, unless you count Google competitors as indirect “winners” in any Google setback. Amazon (NSDQ: AMZN) and Apple (NSDQ: AAPL) have built healthy businesses selling contemporary, in-print e-books. The big money will continue to be in that space, which is unaffected by this settlement. It’s also a market where Google is a new entrant and a small presence, so far.

But even though there aren’t any big winners from this recent decision, there are some parties who lost out. First of all, Google would have been positioned to have a dominant position in the market for in-copyright but out-of-print works, so it has lost something. That’s not a huge or lucrative market, but it’s not insignificant either, and would have seen a fair amount of use by researchers and universities. Speaking of academics, they’re the ones most likely to want full copies of hard-to-find out-of-print books, so they have also clearly lost out here. Finally, authors of some out-of-print books would have seen a new, albeit modest, revenue stream. The “status quo” for them just means that when searchers find their works in Google Book Search, they’ll continue to be directed to used book stores—a solution that’s inconvenient for users and doesn’t get a penny to publishers and authors.

Link to the rest at Paid Content

Ebooks, Google