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U.S. launches formal investigation into Google's digital books settlement

The Justice Department says a proposed agreement with authors and publishers over Google's project to scan millions of books into a digital format raises antitrust concerns.

July 03, 2009|Alex Pham

The Justice Department on Thursday said it had launched a formal antitrust investigation into the proposed settlement over the Google Inc. project to scan millions of books into a digital format.

The department in April canvassed organizations, including two nonprofit groups, that raised objections to Google's settlement with the Authors Guild and the American Assn. of Publishers. The queries were considered informal.

In a letter Thursday to the federal judge overseeing the settlement, the department framed its intent more clearly.

"The United States has reviewed public comments expressing concern that aspects of the settlement agreement may violate the Sherman Act," which guards against anticompetitive practices, wrote William F. Cavanaugh, a deputy assistant attorney general at the Justice Department.

Cavanaugh wrote that the department had "no conclusions as to the merit of those concerns" but saw issues that "warranted further inquiry."

Google said it was cooperating with the investigation.

"The Department of Justice and several state attorneys general have contacted us to learn more about the impact of the settlement, and we are happy to answer their questions," Google spokesman Gabriel Stricker said.

The agreement, reached last fall, settles two copyright infringement lawsuits brought by authors and publishers against Google's project, which is designed to create a searchable library of works that would become the basis of a digital book market.

In recent months, a number of parties have objected to the settlement, including Consumer Watchdog in Santa Monica, the American Library Assn. and the Internet Archive, a nonprofit organization that seeks to digitize public domain books and make them freely available online. Many of the objections involve concerns that Google would create a monopoly on digital books.

Stricker maintains that Google's efforts would be good for consumers.

"It's important to note that this agreement is nonexclusive and, if approved by the court, stands to expand access to millions of books in the U.S.," he said.

Paul Aiken, executive director of the Authors Guild, downplayed the significance of the Justice Department's letter. "It appears to be just an official acknowledgment to the court of an investigation that we have known about for weeks."

Antitrust experts said the letter was noteworthy because it indicated that a full-scale investigation was underway.

"Does that mean they will bring a lawsuit? Not necessarily," said Washington antitrust lawyer Michael G. Cowie, a former assistant director in the Federal Trade Commission's competition bureau. "But it does mean they have a team of lawyers and economists working on the matter."

The Justice Department did not immediately return calls for comment.

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alex.pham@latimes.com

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