Update: DOJ again turns down Google book search settlement

IDG News Service - In a big blow to Google's efforts to build a massive digital-books marketplace and library, the U.S. Department of Justice (DOJ) has come out against the revised agreement to settle copyright lawsuits brought against Google by authors and publishers.

Google, the Authors Guild and the Association of American Publishers (AAP) had hoped that by revising their original settlement agreement they would satisfy the concerns raised by the DOJ in September 2009 and be able to legitimize Google's book-scanning program.

While the DOJ commended the parties for substantially revising the complex settlement agreement in good faith, it was unequivocal in stating that the revision falls way short of addressing the problems the DOJ had identified in the original document.

In particular, the DOJ remains dissatisfied with the proposed agreement's use of the class-action mechanism and its validity under U.S. copyright and antitrust law.

"The [revised settlement proposal] suffers from the same core problem as the original agreement: it is an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the Court in this litigation," reads the DOJ's filing with the U.S. District Court for the Southern District of New York on Thursday, its deadline for submitting its comments to the court.

For that reason, the revised proposal attempts to grant rights that are at odds with the "core principle" of U.S. copyright law, which is that copyright owners have control over "whether and how to exploit" their works. "Those rights, in turn, confer significant and possibly anticompetitive advantages on a single entity – Google," the DOJ's filing reads.

"Under the [revised proposal], Google would remain the only competitor in the digital marketplace with the rights to distribute and otherwise exploit a vast array of works in multiple formats. Google also would have the exclusive ability to exploit unclaimed works -- including so-called 'orphan works' -- without risk of liability. The [proposed settlement's] pricing mechanisms, though in some respects much improved, also continue to raise antitrust concerns," reads the DOJ's 31-page filing.

The DOJ is recommending that the court instruct Google and the plaintiffs to once again revise their proposed settlement, adding that the DOJ makes itself available for consultation throughout the process.

Google and the plaintiffs issued a statement that seems to imply they don't plan to revise the settlement proposal again, saying they "look forward" to Judge Denny Chin's review of the DOJ's filing and comments from the backers of the proposal.

"The Department of Justice's filing recognizes the progress made with the revised settlement, and it once again reinforces the value the agreement can provide in unlocking access to millions of books in the U.S.," the statement reads.