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Google settles lawsuit with authors/publishers -- What it means for Google, others and antitrust
Submitted by Scott Cleland on Tue, 2008-10-28 16:02
Google, the most-sued intellectual property infringer in the world, just settled a class action lawsuit with authors and publishers for $125m and a revenue sharing deal going forward; this deal has much broader implications than most would think for Google, for other companies suing Google for theft, and for the pending Google-Yahoo ad partnership.
Implications for Google: After steadfastly maintaining that they had done nothing wrong and that they were protected by the concept of fair use, Google has now de facto conceded that it was broadly infringing on authors' and publishers' copyrights, while also signalling it feared losing in court.
Google also has changed its business model; it now has agreed to revenue share going forward for content that it previously took for free. In other words, Google's business model now has more mouths to feed -- and it suggests there will be even more content mouths to feed -- if other content industries eventually settle with Google. This obviously has long term implications for Google's revenues and margins.
Implications for other companies suing Google: Why this is such an important precedent is that there are lots of other owners of content suing Google for theft.
What remains to be seen is if Google is in "Settlements R Us" mode because it is sitting on $14b in cash -- or if this is a special one-off deal with the authors and publishers.
Implications for antitrust and Google-Yahoo: This settlement spotlights for DOJ that book digitization is now another de facto Google monopoly enterprise.
Meanwhile back at the DOJ, it is becoming more apparent that the reason the DOJ has problems with the pending Google-Yahoo agreement is that DOJ has concluded that Google indeed has market power and that the proposed partnership with its #2 competitor, Yahoo, creates an anti-competitive situation to collude and fix prices.
Bottom line: This was a good day for authors and publishers in that they got compensation from Google for the wrong done to them, while also establishing a going forward Google system to compensate authors and publishers.