New Google Books settlement still faces some scrutiny

Google submitted a scaled-back settlement agreement minutes before its midnight deadline Friday, addressing some of the concerns the Justice Department, online booksellers and authors raised over its previous agreement to create a massive digital library.

But the revised settlement agreement is still under fire from some Web competitors and will still be reviewed by the Justice Department. 

The Authors Guild and American Publishers Association sued Google four years ago for copyright infringement as Google was in the process of scanning millions of books. The parties reached a $125 million settlement earlier this year, but the Justice Department, among others, had concerns about the agreement. One primary concern was that the settlement would give Google too much control over unclaimed works. Another detractor,, said the settlement created an exclusive business arrangement betwen Google and authors.

Under the revised settlement, which was submitted to U.S. District Court Judge Denny Chin late Friday night, the parties said an independent trustee would handle the licensing of unclaimed, or "orphan," works. The court-approved trustee would be able to license the works to competitors, including and Microsoft. The trustee would handle the revenue from those licenses, which would go to charities or to tracking down the authors.

Google also said its algorithm for pricing books would simulate the prices found in a competitive market. Dan Clancy, Google Books Engineering Director, posted more details and links in the corporate policy blog.

"We will review the agreement and our investigation is ongoing," a Justice Department spokeswoman said yesterday, before the new agreement had been submitted.

The spokeswoman added that, in its initial review of the settlement, Justice officials said they thought a properly-structured agreement would "offer important societal benefits."

"We've made a number of changes to the agreement to address concerns raised, while preserving the core principles of the agreement.  We look forward to seeking final settlement approval so that readers, authors and publishers can enjoy its benefits," Google said in a statement before hosting a late-night conference call.

The Open Book Alliance, which has been a harsh critic of the agreement, is not satisfied with the changes.

Alliance co-chair Peter Brantley said, "Our initial review of the new proposal tells us that Google and its partners are performing a sleight of hand; fundamentally, this settlement remains a set-piece designed to serve the private commercial interests of Google and its partners...By performing surgical nip and tuck, (the parties) are attempting to distract people from their continued efforts to establishe a monopoly over digital content access and distribution; usurp Congress's role in setting copyright policy; lock writers into their unsought registry, stripping them of their individual contract rights...and establish a dangerous precedent by abusing the class action process."

The Open Book Alliance says the settlement still gives Google de facto control over acess to and distribution of the "world's largest digital database of books." The Alliance put out its own set of requirements last week.