Abstract
Although the Google Books Settlement has been criticized as anticompetitive, I conclude that this critique is mistaken. For out-of-copyright books, the settlement procompetitively expands output by clarifying which books are in the public domain and making them digitally available for free. For claimed in-copyright books, the settlement procompetitively expands output by clarifying who holds their rights, making them digitally searchable, allowing individual digital display and sales at competitive prices each rightsholder can set, and creating a new subscription product that provides digital access to a near-universal library at free or competitive rates. For unclaimed in-copyright books, the settlement procompetitively expands output by helping to identify rightsholders and making their books saleable at competitive rates when they cannot be found. The settlement does not raise rival barriers to offering any of these books, but to the contrary lowers them. The output expansion is particularly dramatic for commercially unavailable books, which by definition would otherwise have no new output.
Highlights
AND SUMMARYThe Google Books settlement gives Google default rights to digitize and make searchable all books published before January 5, 2009, and to display and sell digital versions of all commercially unavailable books, unless the book rightsholder chooses otherwise
This claim is, we shall see, factually debatable. If true, this claim would mean that rivals would be even less likely to offer these books in the but-for world where the settlement didn’t lower those entry barriers somewhat. Disapproval of this settlement would if critics are right, result in a but-for world where no one offers these commercially unavailable books, which is certainly worse than a world where Google alone offers them, especially given that the settlement commits to competitive pricing
Consider the four main critiques the objectors have made. Their first critique argues that a class action settlement cannot give Google a nonexclusive default license to sell commercially unavailable books, partly because copyright law makes it illegal to copy without express rightsholder authorization
Summary
The Google Books settlement gives Google default rights to digitize and make searchable all books published before January 5, 2009, and to display and sell digital versions of all commercially unavailable books, unless the book rightsholder chooses otherwise. This creates additional output that otherwise would be nonexistent and vastly increases the availability of these books, which otherwise would be limited to those who can find them for resale on the used-book market or for loan from a library. A holding that such a settlement violates antitrust law would prevent Google from overcoming these entry barriers, but set a precedent preventing any rival from overcoming them either, condemning us all to zero output of these books and an effective price of infinity for new copies of them. Nor does the settlement in any way increase the barriers that Google rivals might face in offering similar institutional subscriptions To the contrary, it lowers those barriers for the same reasons described above for all books, whether commercially available or unavailable. Given that the BMI agreement was neither per se illegal nor a rule of reason violation, the Google books settlement cannot violate antitrust law either
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