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Rolling Admissions the Book Settlement is Anti-competitive

Google has begun to admit and make concessions that the Book Settlement it originally negotiated with authors and publishers is anti-competitive.

To try and win the support of the biggest libraries, Google has now cut a potentially exclusive side deal giving the largest libraries the benefit of a price oversight/arbitration mechanism per the New York Times.

  • This tacit admission by Google that the Book Settlement creates a monopoly without any competitive accountability or checks and balances, strongly suggests that more rolling admissions and concessions will be coming from Google in the months ahead, if it expects to get the settlement approved and/or escape antitrust scrutiny or intervention.     
  • In recognizing some of the anti-competitive problem in the settlement and the need for inclusion of the principle of oversight/accountability, Google will be hard pressed to argue against why smaller and less politically-connected interests than the big libraries should not warrant similar or stronger protections against the anti-competitive structure of the Google Book Settlement. 
  • Moreover, the current concession creates a new monopoly price discrimination regime where one set of parties gets one set of prices that others cannot. While different prices may be legitimate for volume or other considerations, Google will have to create a principled defense/approach that the purpose and operation of its proposed implicit price discrimination regime is competitive and not anti-competitive. 

Practically, Google may be beginning to realize that by de facto trying to bypass Congress and legislate the rules of the future digital book marketplace via a court-approved book settlement may have the unintended effect of opening a "Pandora's Box" of antitrust, copyright, privacy, and other issues.

  • This dynamic likely will only get more complicated not less as time passes.