US Justice Dept Voices Concerns Over Google Books Settlement

The U.S. Department of Justice voiced several concerns Friday night about a legal settlement Google Inc. (GOOG) struck with authors and publishers to make millions of books available online, and encouraged the parties to make changes to the deal that would address those objections.

"Because a properly structured settlement agreement in this case offers the potential for important societal benefits, the United States does not want the opportunity or momentum to be lost," the department said in a 32-page legal brief.

Government lawyers said the current settlement raised antitrust, copyright and class-action law concerns, and should be rejected in its current form.

The department said the agreement needed better protections for unknown copyright holders and should better address the concerns of foreign authors and publishers. The department also said the parties should limit some licensing provisions, eliminate joint-pricing mechanisms among publishers and authors and address other competition concerns.

The department's comments came in a brief filed with a federal trial judge in New York who must decide whether to approve the settlement. U.S. District Court Judge Denny Chin has scheduled a hearing for Oct. 7 to consider the matter.

Google reached the settlement last year, agreeing to pay $125 million to establish a registry to allow authors and publishers to register their works and get paid when their titles are viewed online. The deal resolved a consolidated lawsuit in which authors and publishers sought to block the company from scanning books and making them searchable online. The plaintiffs alleged that Google's book search project violated copyrights.

Supporters and critics of the settlement have flooded Chin with comments on the pending agreement.

Critics, including Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN) say the settlement gives Google a new monopoly to exploit copyrighted books and could make it difficult for rivals to compete in the market for digital titles.

Google and its supporters say the deal is a landmark agreement that will give the reading public unprecedented access to digital books and open up a new stream of revenue for authors and publishers.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; [e-mail]