An Antitrust Analysis of the Google Book Search Settlement

Jianji Wang, University of St. Thomas School of Law

Abstract

The Google Book Search settlement has raised intense debates on its far-reaching effects on copyright and digital distribution of books. This paper focuses on three issues that raise antitrust and competition concerns. First, the Books Rights Registry created by the settlement is not a cartel of the authors. Due to an author’s ability to opt out from the settlement or to set an independent price for the books, the Registry cannot act as a cartel because it lacks a price control function. Second, Google does not violate the section 2 of the Sherman Act by monopolizing the digital books. The settlement is not an exclusive agreement to bar possible competitors such as Microsoft or Amazon from entering the market and competing with Google. Neither do the orphan works with little commercial value give Google any insurmountable advantages on competition. Third, Google’s default pricing mechanism does not constitute price-fixing under section 1 of the Sherman Act. Google is authorized by authors or other rights-holders to set the price of online access to consumers. The authors’ right to set an independent price and the potential competition from Microsoft and Amazon, would negate any reasonable economic incentives for Google to charge a high (that is, supra-competitive) price. In brief, there is little difference between the prices set by Google’s default pricing algorithm and what would be set by direct competition among rights-holders.