EU Investigation Puts GBS Power Grab in Perspective

The European Commission’s Directorate General for Competition announced today that it was opening an investigation into allegations of Google abusing its dominance in online search.

“The Commission will investigate whether Google has abused a dominant market position in online search by allegedly lowering the ranking of unpaid search results of competing services which are specialized in providing users with specific online content such as price comparisons (so-called vertical search services) and by according preferential placement to the results of its own vertical search services in order to shut out competing services,” said the Commission in a press release.

In opening the investigation, the Commission joins other investigations about Google’s use of its monopoly on search to stifle competition in vertical search markets like books.  The Texas Attorney General opened a similar investigation into Google’s search manipulation in September and Harvard Professor Ben Edelman released a study that found that “…Google’s systematic promotion of its own services sharply reduces the space available for others.  And with results systematically featuring listings from Google and its hand-selected partners, there is reason to doubt Google’s promise of unbiased results guided only by relevance.”

Like we saw with the GBS, Google’s own business behavior is uniting a chorus of voices against itself.  A cross-section of voices from around the world including the U.S. Department of Justice, foreign governments, State Attorneys General, authors, independent publishers, libraries, consumer advocates, privacy groups and hundreds of other organizations have united in opposition to the GBS because of its faults on antitrust, copyright and class action grounds.

Akin to Professor Edelman’s report, a report from Technology Review’s Christopher Mims after parsing through University of Chicago Law professor Eric Fraser’s exhaustive paper on the GBS concludes that the GBS means “that under the current settlement, there is no reasonable expectation that a competitor to Google Books will or could ever arise. Because Google will be allowed to set prices more or less in collusion with publishers, this will give Google no effective competitors in this space. Google will be a de-facto monopoly.”

As the evidence against Google mounts, it’s worth revisiting why this is a bad thing for consumers.  Google controls about 70% of the online search market in the United States, and in some other countries, Google’s marketshare is above 90%.  Why does that matter for you?  Because Google controls so much of the online search market, it is the de facto portal to the internet for many users.  Thus, as Google puts it, it has the power to be the kingmaker of the internet, picking winners and losers simply by placing certain results at the top of search pages.

Book search is another vertical market that Google is seeking to dominate.  As GBS objectors from around the globe have stated before, granting Google an exclusive set of rights over millions of books through a flawed class action process that seeks to turn copyright policy on its head and trample individual author’s contract rights – as the GBS seeks to do – is a terrible idea.

Google-Hachette Rumblings

More voices are speaking out on the Google-Hachette deal.  And few seem particularly enthused.

The French author’s association, La Société des Gens de Lettres de France (SGDLF), came out this morning urging its membership to be thorough in their contract dealings with the search giant.

While recognizing that this deal could offer some benefits, the SGDLF highlighted the deal’s potential to weaken the French cultural ministry’s digitization project, announced last year—largely in response to Google’s unlawful scanning efforts.

Sam Edenborough, literary agent of the London-based Intercontinental Literacy Agency, stated that he would “cautiously welcome” the deal in the UK.  Novelist and GBS critic Nick Harkaway is also cautioning the UK publishers:  ”Having run into trouble with the Settlement, they have realized there are other ways of getting what they want.”

Mark Le Fanu, general secretary of the Society of Authors since 1982, is advising authors to pay special attention to details concerning revenue share and if rights can be reacquired “when their work is no longer being sold effectively.”

Google has scanned more than 100,000 French works that are still protected by copyright.

Is Google Turning the Page?

The New York Times today reported on a new agreement that grants Google limited rights to scan out of print publications owned by French publisher Hachette Livre.

Readers will remember that Hachette Livre was among the broad group of authors, librarians, public advocates and government officials that opposed the pending Google Book Settlement. French opposition was prominent from both private and official channels.

While details are scarce and still being finalized, the New York Times’ account points to a new Google strategy that eschews using the class action process to secure a blanket agreement and returning to the old fashioned way of doing business – around a negotiating table.

And while the French publisher is hopeful about their new deal with Google, the old deal still pending before Judge Chin retains the smell of an overripe Camembert.

Mr. Nourry said Hachette retained the right to take legal action against Google over its past book scanning activities, saying “we have agreed to disagree about the past.” He emphasized that the accord announced Tuesday was an “agreement,” rather than a “settlement.”

This turn of events is a welcome change from Google, who until recently was interested in pursuing a “my way or the highway” approach.  Now that we’re seeing that Google can successfully negotiate traditional deals for publishing rights, we have to wonder if they’ll drop or amend the GBS in a similar manner.