March 2009

The proposed seminal book settlement of the publishers/authors class action suit against Google, if ratified by Federal Court this June, has the potential to de facto legislate for the U.S. and much of the world, both the monetization mechanism and competitive trajectory of much of the digital books market -- a highly strategic segment of the world's digital knowledge base.

• The competitive stakes are high because books represent some of the highest quality searchable content available in the world.
• Moreover, the seven million books digitized by Google and covered by the settlement dwarf any other digital library in the world.
• Furthermore, the settlement would de facto grant Google exclusive control over the "orphan works" covered by the settlement, which comprise the vast majority of the seven million digitized books.

As an expert analyst on the future of Internet competition, the central question I ponder is whether the mechanism and trajectory that the Google book settlement would entrench -- is competitive or anti-competitive?

• More simply, is antitrust pertinent to the Federal court's disposition of this proposed copyright-infringement settlement?
• The facts and analysis show antitrust is highly relevant to this potential supra-constitutional, court-created, digital book marketplace.

First, the core facts suggest antitrust concerns are relevant to the ratification process of the proposed digital book settlement.