Antitrust Implications of GBS Highlighted in Rep. Hank Johnson’s (D-GA) Questions at HJC Hearing

Yesterday, we called attention to the line of thoughtful questioning by Congressman Hank Johnson (D-GA) during the House Judiciary Committee’s hearing on the Google Book Settlement. Today, we are posting an unofficial transcript of Rep. Johnson’s part of the hearing, below.  

Rep. Johnson expressed concerns with copyright issues, but he spent most of his time on a line of questioning that addressed the significant antitrust implications raised by the proposed settlement. 

With the deadline one week away for the Department of Justice to submit a brief to the Court, we believe more attention should be focused on how this settlement potentially violates antitrust regulations.

Hank Johnson (GA-04): Thank you Mr. Chairman. Who were the parties to the settlement agreement? In other words, who sued whom? 

Authors Guild: We sued him, down there [points to David C. Drummond] 

Hank Johnson (GA-04): Who sued whom? 

Authors Guild: The Authors Guild brought the first class action lawsuit against Google in September 2005. Five publishers then filed a month later in a non class action lawsuit, also against Google basically over the same set of facts. 

Hank Johnson (GA-04): Was there any entity with the interests of the orphan works owners a party to the litigation? 

Paul Aiken, Executive Director, Author’s Guild: Orphan works are… works… 

Hank Johnson (GA-04): I understand, so it’s totally impossible to form group that represents the orphan rights owners but perhaps there can be some kind of entity set up to that would be like a fiduciary for the orphan works owners. That was not done in this litigation. What troubles me about this settlement is what has been included in the scope of this agreement.  Of course settlements are part of ordinary litigation, I love settlements myself.  It seems this settlement will bind orphan works owners. It’s not clear to me that copyright owners of orphan works were adequately represented. I am also particularly sensitive to the antitrust implications of the settlement. I am troubled by the exclusive access Google will have. Why should Google be the only entity permitted to see access to orphan works? Mr. Balto? 

David Balto, Center for American Progress: It’s important to note that the number of orphan works is extremely limited…

Hank Johnson (GA-04): It doesn’t matter if it’s one or ten thousand. 

David Balto, Center for American Progress: My testimony submits that it’s relatively modest, less than a million works. The problems people are presenting with orphan works would prevent orphan works from ever being accessible. I think this is one sound approach to doing so. 

Hank Johnson (GA-04): So Google as gatekeeper is the way to settle this universally? 

David Balto, Center for American Progress: I used to be an antitrust enforcer and these people have gotten really sound antitrust advice. They have tried to have there not be a critical gatekeeper and have tried to makes orphan works issues accessible. I tend to think it’s not that significant an advantage. 

Hank Johnson (GA-04): There are those that would disagree with you and I’d be one of those. 

David Balto, Center for American Progress: By the way, there’s a great brief by these thirty antitrust law professors, and thirty is more than two, and they’ve gone and analyzed the settlement at length and found it to be nonexclusive and I recommend that analysis to you. 

Hank Johnson (GA-04): Professor Picker, why should Google be permitted to be the only one to sell access to orphaned works? 

Randall Picker, University of Chicago: As you said, in most tort and class action cases it’s pretty routine to appoint a representative as guardian to future claimants. A very natural approach here would have been to do this. To go back to what Google has said, they favor broad licensing access to orphan works and I agree with them. 

Hank Johnson (GA-04): Where would they get the license from? 

Randall Picker, University of Chicago: Only from the government or the courts. 

Hank Johnson (GA-04): So in other words you are going to bind the legislative branch to a decision made by the judicial? 

Randall Picker, University of Chicago: That’s a tricky question. I don’t know the answer to the question of whether or how you separate legislation from a settlement. 

Hank Johnson (GA-04):  This would be a classic case of legislation from the bench. This gives parties to the litigation and others a view of the various issues involved here.  The scope of the settlement is coming very close to whittling away the rights of the US Congress. The Congress should decide who has rights over open works and not private entities negotiating a settlement. How does Google Books work? 

David C. Drummond: Many of the books we have are in the public domain so you can download those. The in copyright books will be in the cloud. Amazon knows a lot about this, they’ll be streamed to you and not downloadable. Once you purchase, you’ll have indefinite access. 

Paul Misener, Amazon: One of the future business models reserved to Google in the proposed settlement is for print on demand. Which is the way the industry is going. 

Hank Johnson (GA-04): What about audio books? 

David C. Drummond, Google: Only thing that is covered under the settlement is the ability to make books available to the visually impaired. 

Hank Johnson (GA-04): Why aren’t audio books covered? 

David C. Drummond, Google: We just didn’t cover it. 

Hank Johnson (GA-04): I don’t think this settlement will withstand a separation of powers review on the issue of applicability to anyone other than parties to the settlement.  Can you talk about that Mr. Simpson? 

John Simpson, Consumer Watchdog: I think one of the problems here is that settlement goes so far beyond the original complaint. I would put myself in the camp that snippets are appropriate for fair use.  But it’s gone way beyond that into the realm of new business model. I think that’s a problem. 

Hank Johnson (GA-04):  How can you create a competitive environment if there is only one provider? I am concerned about that. 

Thank you.