Google Settles

Today Google settled with publishers and authors who sued them over their library digitization project. Google will pay a $125 million settlement and will develop a registry that will enable publishers and authors to receive payments for use of their work - payment based on, among other things, libraries paying for access.

What it does not do is resolve the underlying copyright issues, according to The New York Times.

Jeffrey Toobin predicted this outcome some time ago in The New Yorker. And in his analysis, it's not good news for the rest of us.

“If Google says to the publishers, ‘We’ll pay,’ that means that everyone else who wants to get into this business will have to say, ‘We’ll pay,’ ” [Lawrence] Lessig said. “The publishers will get more than the law entitles them to, because Google needs to get this case behind it. And the settlement will create a huge barrier for any new entrants in this field.”

In other words, a settlement could insulate Google from competitors, which would be especially troubling, because the company has already proved that when it comes to searches it is not infallible. “Google didn’t get video search right—YouTube did,” Tim Wu, a professor at Columbia Law School, said. (Google solved that problem by buying YouTube last year for $1.6 billion.) “Google didn’t get blog search right—technorati.com did,” Wu went on. “So maybe Google won’t get book search right. But if they settle the case with the publishers and create huge barriers to newcomers in the market there won’t be any competition. That’s the greatest danger here.”

The full settlement agreement - which is pending judicial approval - is available here.