From PublishersLunch:

Google Rebuts Settlement Objections from Justice and Others: It's "A Compromise"

Google finally got their chance to speak in their own voice (or at least their attorney's voice) to the many objections raised over the proposed settlement with the Authors Guild, the AAP, and others in a brief filed yesterday with the court.

In places the filing all but sneers at "many of those complaining about the settlement's terms [who] are not themselves class members." The overwhelming focus of Google's arguments is on rebutting points raised in the recent opinion from the Justice Department, suggesting that is the primary set of arguments that Google believes might carry any weight with the judge.

Among their recurring themes is to emphasize that "a settlement is a compromise" and will never please all parties. For those who worry about Google's alleged-monopoly on orphan works, the note that "Google is a new entrant and currently has 0% share in any book market. It does not have monopoly power and there is no 'dangerous probability' that it will acquire such power." Addressing the key point of any judge's decision in a class action suit--is it fair, reasonable and adequate to the class members--Google reminds the court that class members can opt out or not display their works.

In the preamble, they write: "No one seriously disputes that approval of the settlement will open the virtual doors to the greatest library in history, without costing authors a dime they now receive or are likely to receive if the settlement is not approved. Nor does anyone seriously dispute, though few objectors admit, that to deny the settlement will keep those library doors locked while inviting costly, fragmented litigation that could clog dockets around the country for years. The objectors raise anxieties about the ASA but do not identify harms it will cause. They raise anxieties about the scope of the ASA but fail to ground them in pertinent doctrine and offer no practical alternatives. Competitors such as Amazon raise anxieties about Google's potential market position, but ignore their own entrenched market dominance."

As for the objections of Justice, they "and the other objectors have failed to articulate a meaningful principle on which the Court could reject the ASA. That the ASA contains forward-looking elements, or that it represents in some sense a 'deal' between the parties, provides no basis for the Court to reject it. The ASA is not 'a bridge too far.' It is a remarkably creative settlement, beneficial to the parties and absent class members and the public, but it is also a settlement of the case the Court has before it" (if they do say so themselves.)

To the arguments that the settlement overreaches turning a legislative matter into a judicial, they note: "cases may be decided and settlements approved even if Congress has the power to achieve the same result (or a different one) through legislation. Many class actions have influenced the law and established substantive policy in ways much more fundamental and far-reaching than the ASA.... Nor does the ASA interfere with orphan works legislation, as some objectors allege. Congress remains free to legislate in this area, and Google has long supported such legislation."

Google argues that "with only one significant exception, the parties sought to implement every suggestion the United States (Justice) made in its September submission"--the idea of opt-out versus opt-in. On that point, they write that "the opt-out feature of the settlement is of vital importance because that feature makes it possible for the plaintiffs and Google to establish a market for out-of-print books that otherwise simply could not exist in light of the prohibitive transaction costs of identifying and locating individual Rightsholders of these largely older, out-of-print books. But the notion that this method of proceeding -- which has huge advantages for the world of potential readers, scholars, and other users -- is a disadvantage to the Rightsholders themselves is certainly wrong. The Rightsholders, by definition, once offered these books to the world; there is not the slightest reason to suppose, a priori, that they now want the works they published to remain unavailable, or would not benefit from a process that makes them available, helps identify the Rightsholders, helps resolve disputes over ownership, and collects money on Rightsholders' behalf."

Many of the competition and antitrust arguments made by the search company are above my pretend-lawyer ability to follow, but the spirit is clear, as they echo some of the pro-competitive arguments made in earlier briefs from others. "The ASA lowers barriers to entry for other potential distributors of similar products. By clarifying which books are out of copyright, the ASA lowers the costs of digitizing these books and offering them as part of an institutional subscription." And for copyrighted works, the creation of the Registry and the unclaimed works fiduciary "dramatically lowers the cost to rivals of obtaining licenses that will enable them to offer their own subscription products." As to the concerns that Google will price institutional subscriptions unfairly, "Google has now signed agreements with its library partners, such as the University of Michigan, which allow those universities to challenge through arbitration whether the institutional subscription price tiers meet the 'broad access' objectives."

Google admits to having spent "hundreds of millions of dollars to digitize so much of the printed history of humanity." They also disclose that they pay "approximately $2.5 million per year to license metadata from 21 commercial databases of information about books." And they have digitized early copyright records, and made them available here.