Now Online: Prepared Testimony and News from Today's House Hearing on Competition and Commerce in Digital Books
As we said last night, a hearing (by the Judiciary Committee) was scheduled to take place this morning (DC time) to discuss competition in the digital book arena.
Most of the witnesses have posted their prepared testimony to this page. Each name is hyperlinked to their prepared statement (PDF File).
Fundamentally, Rep. [Hank] Johnson (D-GA) commented that the scope of the settlement is most troubling, with a private settlement erecting Google as a gatekeeper. He also cited the lack of consumer protections outlined by some witnesses as an area of concern.
In testimony before the House Judiciary subcommittee this morning, Marybeth Peters, U.S. Register of Copyrights, in her first detailed comments on the subject, blasted the Google Book Search Settlement as “fundamentally at odds with the law.” In a blistering assessment of the deal, Peters told lawmakers that the settlement is in essence a compulsory license that would give Google the ability to engage in activities, such as text display and sale of downloads, that are “indisputable acts of copyright infringement.”
Most damaging, however, was Peters’s insistence that only Congress—not the courts—could enact such licenses, and her repeated assessments that the settlement deprived Congress of its role. “By permitting Google to engage in a wide array of new uses of most books in existence the settlement would alter the landscape of copyright law,” Peters said. “That is the role of Congress, not the courts.” She said that by allowing out-of-print works to be swept into the settlement, the deal “makes a mockery of Article I of the Constitution.” Only Congress, she stressed, after a full public debate, can set such new rules.
A written statement released by Judiciary Committee chairman John Conyers’s office said that “it is unclear whether the settlement is truly fair to copyright owners.” However, during the hearing, he said, “The settlement has, in my view, has been fair to copyright holders.”
A spokesman for Rep. Conyers wasn’t immediately available for comment about the chairman’s views about the settlement.
In her written testimony, Ms. Peters said that when the Google Books settlement was first announced, the copyright office’s “initial reaction was that this was a positive development.” But as staffers met with both parties, lawyers and academics, “and began to absorb the many terms and conditions of the settlement,” she said, “we grew increasingly concerned.”
[Marybeth] Peters [head of the copyright office] can't block Google's settlement with U.S. authors and publishers. That decision rests with U.S. District Judge Denny Chin, who has scheduled an Oct. 7 hearing in New York to review the settlement.
"Any bookseller--Amazon, Barnes & Noble, Microsoft--would be able to sell the books covered by the settlement," said David C. Drummond, Google's chief legal officer. Under the proposed settlement, Google would get 37 percent of revenue from e-books sold through its service, and through the reseller program, the reseller would get "the significant majority" of that 37 percent, Drummond said.
[Snip]
But Amazon indicated it's not interested after Judiciary Committee Chairman John Conyers, a Democrat from Michigan, asked the company's reaction to this "thrilling new piece of information" from Google.
"The Internet has never been about intermediation," said Paul Misener, Amazon's vice president of global policy. "We're happy to work with rights holders without anybody else's help."
[Snip]
The hearing revealed some representatives, including the chairman, to be allies of Google. Also generally speaking in favor of Google's work were Zoe Lofgren and Brad Sherman, both Democrats from California.
"It is a good thing to provide millions of Americans access to published works that otherwise wouldn't be available to them," Conyers said. "A library available to every household with an Internet connection--this could be the greatest innovation in book publishing since the Gutenberg press."
Today's announcement also seems in line with Google's larger goal of becoming the world's preeminent provider of digital books, including new in-print books, which are not part of the Settlement.
In July, Google Books engineering director Dan Clancy outlined Google's vision for its digital books future, which involved a product called Google Editions, a mechanism for selling e-books via any retailer (Google itself, other online retailers, as well as brick-and-mortar stores).
That vision, which seems embodied in today's statement, involves Google "hosting" copies of e-books on their servers. Purchasers would then simply access their purchases via their personal devices, rather than actually download the works to the devices themselves.
As it happens, Google's settlement agreement already provided resellers access to scanned books both in and out of print. So the olive branch Drummond offered at today's hearing, though presented as a concession, was not a modification of the terms of the settlement. Rather, it seemed aimed as a signal to lawmakers that the deal would do nothing to hinder competition.
"That's very generous of you," said Judiciary Committee Chairman John Conyers.
...Rep. Zoe Lofgren (D-California) said the deal should be approved, calling it a “rare truce in the copyright wars.”
Moreover, Congress was to blame for the whole mess anyhow, by failing to fix the orphan book issue in recent years.
Rep. Zoe Lofgren (D-CA) also suggested that Congress simply reduce the number of books still in copyright by repealing the 1998 Sony Bono Copyright Extension Act, which added extended copyright terms for 20 years, reportedly to keep Mickey Mouse from falling into the public domain.
Google also got powerful testimony on its behalf from Marc Maurer, the president of the National Federation of the Blind, who accused the online book industry of deliberately frustrating 1.5 million blind Americans.
“So far Google is the only company to make millions of books available to the country in ways that can be used by blind readers,” Maurer said. “We want the right to buy books. But now opponents of this settlement would like to close this market.”
Editors Note: Hey, let's give others a bit of notice.
Yes, of course, Google has scanned millions of out of-print titles to this point and made them available a variety of ways. However, this doesn't mean that other organizations like The Internet Archive, Project Gutenberg, ebrary, NetLibrary, and the International Children's Digital Library are doing some great work digitizing/scanning books and other materials, often available online for free or for free via a local library. Want more free online books? The visit the Online Books Page. It contains material from a large variety of sources including Google. Just look at how much has been added in the past few days.
But critics said the settlement gives Google an unfair advantage by allowing it blanket access to most books. The settlement rewards Google for scanning first without asking authors and publishers for permission, said Paul Misener, vice president of global policy at Amazon.com.
Amazon has scanned about 3 million books, Misener said.
"The difference is, and probably the only significant difference between their book-scanning project and ours, is we first sought permission from the rights holders," he said. "We went to the rights holders, and one by one, negotiated deals ... to be allowed, legally, to scan these books."
The governments of Germany and France have joined authors in the U.S., Japan and Europe to oppose the settlement, saying it doesn’t give copyright owners enough choice about how their content is used.
“There are some good points the court cannot ignore” while some attacks are unfair, said Terence Ross, a copyright lawyer with Gibson, Dunn & Crutcher in Washington who’s following the case and doesn’t represent either side. “He may ask the parties to go back, without rewriting the agreement from scratch, and address certain objections. Innovation often poses problems for the law and established bureaucracy.”
"We believe strongly in an open and competitive market for digital books," Google said in a statement. "As part of that commitment, today we announced that for the out-of-print books being made available through the Google Books settlement, we will let any book retailer sell access to those books. Google will host the digital books online, and retailers such as Amazon, Barnes & Noble or your local bookstore will be able to sell access to users on any Internet-connected device they choose."
The announcement did not appease some critics, who said the proposal still leaves Google in near-complete control of the digital files.
"I fail to see what's really new here," said Peter Brantley, a director at the Internet Archive, a San Francisco nonprofit organization that collects and makes available various publicly available content free of charge. "It's like Macy's telling Sears, 'You can sell Macy's clothing.' There's no fundamental change of the conditions under which Macy's acquires those clothes. Google remains in control.
Paul Aiken, executive director of the Authors Guild, applauded Google's decision [allowing rivals to sell access to the digital copies of millions of out-of-print books it has amassed ] saying it would generate additional book sales. "Having books available through multiple outlets directly addresses the antitrust issues," he said.
[Snip]
In an interview, Google Chief Legal Officer David Drummond said Thursday's measure should put to rest concerns that "Google and only Google will have the ability to get the full portfolio" of digital works.
[Snip]
The Justice Department, which has been discussing its concerns about the deal with the parties, is weighing whether to flag those concerns to the court, according to these people. Judge Chin has given the Justice Department a deadline of Sept. 18 to file a brief.
Among other measures, the department is worried that the agreement doesn't contain enough checks and balances to prevent publishers from charging higher prices for digital book subscriptions, said these people.
Mr. Drummond said Google continues to talk to the Justice Department but "doesn't have any plans to make any changes at this point." A Justice Department spokeswoman declined to comment.
Neither privacy nor competition is the main reason for scepticism about the Google books settlement. The problem is that the arrangement is a usurpation. It is a false analogy to compare Google Books, as some defenders of the settlement do, to Amazon’s Kindle system of e-books. Authors and publishers participate in Kindle by granting Amazon permission to publish in that format. Google’s system would dispense with such permission. It is thus a change in the regime of property rights. The settlement authorises a large corporation to manage the rights of authors it cannot locate, and to justify itself with vague invocations of our cultural heritage.
The discussions are aimed at easing Justice Department concerns the deal would let Google discourage other companies from competing for access to the books online, said one of the people. Both spoke on condition of anonymity.
Earlier today, U.S. District Judge Denny Chin in New York ordered Google and the other parties to the settlement to respond to an outpouring of viewpoints questioning the plan to create a digital book library.
[Snip]
Chin today said he has received about 400 filings by individuals and groups who object to the deal, support it or want some legal points to be considered.
[Snip]
He ordered the parties in the case to respond by Oct. 2 “in light of the volume of submissions and the apparent public interest in the case.” Chin plans to hold an Oct. 7 hearing to decide whether to approve the $125 million agreement reached by Google to establish a “Book Rights Registry,” which would identify and compensate rights holders whose books have been scanned by Google.
Would Google be willing to do this? Google CEO Eric Schmidt says he’s open to ideas, but none of the critics are putting forward new solutions that would resolve the legal case that was filed against his company.
“I’m open to a better solution. You will recall, we had our solution, and we were sued over it. And we then had a-god-knows-how-many years of negotiations with 27 parties, and we’ve actually produced a deal,” Schmidt said, when I spoke to him yesterday.
[Snip]
While noting the concerns, Schmidt said Google still believes the settlement is the best way forward.
“I want to be very clear and on the record here. We are absolutely in favor of the settlement, and we would like the settlement to go through. We have not changed our view on the validity of this. I think if anything, the criticism tells you how important it is to get the settlement going because without a settlement, you will end up in a situation where people doing what Google’s doing, this will ultimately be sorted out in the courts, because the government is not going to pass any laws in this area any time soon. At least there seems to be no desire to do that, he said.
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