November 16, 2009

Google Inc. and two author and publisher groups submitted a modified version of a controversial settlement over digital books, but it appears likely the fight over the agreement will continue.

The revised pact submitted late Friday would allow Google to distribute millions of digital books online, but would cut the number of works covered by the settlement by at least half by removing millions of foreign works.

Yet the issue of whether it is fair for the settlement to let Google distribute books whose legal rights owners haven't been identified—known as orphan works—is still drawing criticism.

People familiar with the matter say the Justice Department remains concerned that the fact the settlement gives Google immunity from lawsuits related to orphan works may be anticompetitive. The department is expected to file its reaction to the modified agreement by early next year.

A spokeswoman for the Justice Department said the department is reviewing the revised agreement and its investigation into the settlement is "ongoing."

Google, the Authors Guild and the Association of American Publishers designed the revised settlement to mollify the Justice Department and other critics who blasted the original settlement as overly broad and anticompetitive. Under that settlement, announced in Oct. 2008, Google would gain permission to distribute and sell millions of digital books online in exchange for sharing revenue with rights holders.

The new settlement keeps the same structure, but makes a number of changes, including adding more pricing options to address concerns about potential price-fixing and clarifying what sort of services Google can offer related to digital books.

It also aims to address some of the concerns about orphan works by establishing an independent fiduciary to look out for the interests of those rights holders and specifying that revenue collected from those works won't flow back to other rights holders—a move aimed at addressing criticism from the Justice Department.

Source:- http://online.wsj.com