While Google may be slowly losing the legal battle over the amended Google Book Settlement Agreement, the protracted legal process and Google's political "slow rolling" of the broader process are enabling Google to win the much larger marketplace war for global dominance over digital content and distribution.
- From a big picture perspective, Google is cleverly "playing" and slow rolling both rights holders and the DOJ because Google understands that time is on Google's side, not the side of rights holders or the Government.
- Google's market dominance is only growing and becoming more irreversible, and copyrighted material is only being devalued as long as Google is the only entity that can copy it without permission and currently commercialize it for themselves via search without any compensation to rights holders.
Takeaway #1: DOJ still strongly objects to the proposed amended settlement (ASA).
In the DOJ's latest statement of interest to the court, the DOJ continues to strongly object that the ASA violates three bodies of law: class action, copyright and antitrust. Key opposition quotes:
- The ASA would "grant Google sweeping control over digital commercialization of millions and millions of books." p.4
- The ASA seeks to "carve out an exception to the Copyright Act." p.9
- "The United States believes that the Court lacks authority to approve the ASA." p.11
- "Good intentions of members of a price-fixing combination are no legal justification for lessening price competition." p.18
- "Google retains its upstream monopoly." "The reseller clause cannot create new competitors to Google." p.22
Takeaway #2: Google's political influence over the DOJ appears to be successfully forcing the Antitrust Division to negotiate indefinitely without the threat of litigation. This enables Google to continue to manipulate the class action process, undermine copyright law, and act anticompetitively, all while Google inexorably accumulates more market power and dominance over global digital content and distribution.
- The DOJ's September 19, 2009 statement of interest to the court, offered the standard prosecutorial "carrot and stick" approach. The DOJ's conclusion firmly stated:
- "The DOJ should reject the Proposed Settlement in its current form and encourage the parties to continue negotiations..." p.27
- The DOJ's February 4, 2010 amended Statement of Interest did not offer the standard prosecutorial "carrot and stick" approach, it only offered a "carrot" after enumerating and explaining to the Court how and why the Settlement was illegal and that the Court did not have the authority to approve it. The DOJ's conclusion weakly stated:
- "...many of the problems previously identified with respect to the original settlement remain in the ASA. The United States remains committed to working with the parties on the settlement's scope and content."
- Given the strength, breadth and depth of the DOJ's clearly stated legal objections in its statements of interest, it appear Google's political influence over the process has emasculated the normal law enforcement deterrent aspect in a court communication such as this.
- The disturbing political implication here appears to be that the DOJ is no longer urging the court to "reject the Proposed Settlement in its current form...," but only to impose a negotiated settlement, that hopefully addresses DOJ's concerns.
Another disturbing development was DOJ's glaring ommission in its amended statement of interest that ignored and did not formally object to a new critically important fact disclosed since their last statement of interest to the court. That fact is Google is now publicly flouting DOJ's stated concerns about the settlement by publicly claiming that it is currently commercializing the twelve million books that it illegally copied, and that it should not be able to commercialize under the DOJ's views in either of its statements of interest.
- The PBS Newshour quoted Google Book Head Daniel Clancy 12-30-09:
- "Every time you search Google, you're searching 12 million books."
- This fact was spotlighted in the Open Book Alliance's Friend of the Court brief on the Book Settlement.
If the DOJ believes as both its statements of interest claim, that: Google has illegally copied millions of books; and that Google is abusing the class action process in an anticompetitive manner, how can the DOJ not object to the Court about this illegal market behavior and also maintain to the Court that Google is negotiating in good faith when they continue to act illegally and anticompetitively in the marketplace?
Takeaway #3: The absence of a law enforcement deterrent in this antitrust and copyright battle is enabling Google to win the much larger marketplace war for global dominance over digital content and distribution.
The longer that Google can illegally commercialize millions of illegally copied books, the more anticompetitive and insurmountable advantage Google can irreversibly obtain.
- The fact that Google has integrated the twelve million books into its search database and algorithm means that:
- Google is gaining a huge amount of exclusive: searchable content supply, search behavior meta-data of demand, and algorithmic "learning effects" of matching this uniquely known supply and demand.
- Google also knows that the longer it can do this unfettered, the closer it is to achieving "game over" in this marketplace.
In sum, Google is cleverly playing the parties, the DOJ and the Court.
- Google now has maneuvered the U.S. Government into effectively negotiating on its behalf to the Court and others to support Google's ends of universal access to digital books, even if the Antitrust Division seriously objects to Google's means of achieving its ends.
- In this grand political negotiation that Google apparently has engineered, Google has gotten the U.S. Government to adopt its principle of universal access to books, and now apparently its only about negotiating the terms of forgiveness and reward for Google, because any public "stick" or threat of law enforcement appears to have been taken off the table for now in the latest statement of interest.
Simply, U.S. Government antitrust authorities have to decide whether antitrust, copyright and class action laws apply to Google or not.
- The Antitrust Division of the previous Administration was willing to go to court with a Section 1 & 2 monopolization case against Google in order to block an illegal Google-Yahoo Ad Agreement that would have harmed competition.
- The current antitrust division has to decide if it is also willing to go to court with a Section 1 or 2 monopolization case against Google in order to block an illegal book agreement that DOJ states would abuse the class action process, carve out a unique copyright exception for only Google, and grant Google de facto exclusivity to a competitively essential market input.
- The glaring lack of any "stick" of law enforcement deterrent in the DOJ's latest letter to the Court or in the DOJ's press release, suggests that Google could be succeeding politically in emasculating the law enforcement process and buying the time necessary to make its dominance in the digital marketplace permanent and irreversible.
