Picker on Google Book Antitrust Issues

[richards1000@comcast.net]

Listmembers may be interested in the new article on antitrust 
issues arising from the proposed Google Book settlement, by Prof. 
Randal C. Picker of the University of Chicago Law School, 
http://ssrn.com/abstract=1387582 .  HT to Law Librarian Blog. 
Here are excerpts from the abstract:

"This paper considers the proposed settlement agreement between 
Google and the Authors Guild relating to Google Book Search....

"First, the agreement calls for Google to act as agent for rights 
holders in setting the price of online access to consumers. 
Google is tasked with developing a pricing algorithm that will 
maximize revenues for each of those works. Direct competition 
among rights holders would push prices towards some measure of 
costs and would not be designed to maximize revenues. As I think 
that that level of direct coordination of prices is unlikely to 
mimic what would result in competition, I have real doubts about 
whether the consumer access pricing provision would survive a 
challenge under Section 1 of the Sherman Act.

"Second, . . . the opt out class action will make it possible for 
Google to include orphan works in its book search service. . . . 
[T]he settlement agreement [] creates market power through this 
mechanism.... We can mitigate the market power that will 
otherwise arise through the settlement by expanding the number of 
rights licenses available under the settlement agreement. 
Qualified firms should have the power to embrace the 
going-forward provisions of the settlement agreement. We 
typically find it hard to control prices directly and instead 
look to foster competition to control prices. Non-profits are 
unlikely to match up well with the overall terms of the 
settlement agreement, which is a share-the-revenues deal. But we 
should take the additional step of unbundling the orphan works 
deal from the overall settlement agreement and create a separate 
license to use those works. All of that will undoubtedly add more 
complexity to what is already a large piece of work, and it may 
make sense to push out the new licenses to the future. That would 
mean ensuring now that the court retains jurisdiction to do that 
and/or giving the new Registry created in the settlement the 
power to do this sort of licensing.

"Third, there is a risk that approval by the court of the 
settlement could cause antitrust immunities to attach to the 
arrangements created by the settlement agreement. As it is highly 
unlikely that the fairness hearing will undertake a meaningful 
antitrust analysis of those arrangements, if the district court 
approves the settlement, the court should include a clause - call 
this a no Noerr clause - in the order approving the settlement 
providing that no antitrust immunities attach from the court's 
approval."


Robert C. Richards, Jr., J.D.*, M.S.L.I.S., M.A.
Law Librarian & Legal Information Consultant
Philadelphia, PA
richards1000@comcast.net
* Member New York bar, retired status.