Google is making the first step on the quest to fix the broken and unfair copyright laws. It is not surprising the greedy copyright holders and evil Microsoft object to what will benefit the public out of their own interest.

Sep 3rd 2009 – The Economist
The internet giant’s plan to create a vast digital library should be given a green light

TO ITS opponents, it is a brazen attempt by a crafty monopolist to lock up some of the world’s most valuable intellectual property. To its fans, it is a laudable effort by a publicly minded company to unlock a treasure trove of hidden knowledge. Next month an American court will hold a hearing on an agreement, signed last year by Google and representatives of authors and publishers, to make millions of books in America searchable online. The case has stirred up passions, conflict and conspiracy theories worthy of a literary blockbuster.

That is hardly surprising. The proposed agreement, which settles a class-action lawsuit brought against Google and requires the court’s approval, represents a novel experiment in transferring words—and an entire business model—from the printed page to the digital realm. If the agreement survives judicial scrutiny it could become a model for the management of digital-book rights in other parts of the world. That is why the European Commission plans to hold its own hearing on September 7th to examine the deal’s implications. Google’s actions have already been the subject of pointed criticism in Japan, Germany and France, where some publishers and writers reckon it will damage their commercial interests (see article).

Under the agreement’s terms, Google will be free to digitise most books published in America, including those that are out of print. It will then make chunks of text available through its search engine, sell individual e-books, and offer libraries and other institutions subscriptions to its entire database. Google will keep 37% of the resulting revenue and give the rest to a new book-rights registry which will pay copyright holders. Publishers and authors had until September 4th to withdraw from the agreement; those remaining in it can ask Google to remove their titles from its library at any time.

Even critics recognise that the proposed deal offers huge public benefits. By helping to resolve the legal status of many texts subject to absurdly long copyright periods and murky ownership, it will make millions of books more accessible than ever before. Researchers from Manhattan to Mumbai will gain instant access to volumes that would otherwise languish in obscurity. Libraries will be able to offer users access to information far beyond their physical book stacks. And authors and publishers will be able to cash in on long-neglected works.

But critics maintain that the risks outweigh the benefits. They claim it gives Google a dangerous monopoly over digital sales of certain books. And they argue that Google and the registry could act as a cartel and raise the cost of institutional subscriptions to outrageous levels.
Lost and found

The first fear is overdone. True, the agreement gives Google the exclusive right to scan “orphan” texts—titles for which the copyright owner’s identity or location is unknown. But these books are a relatively small part of the market, and most are unlikely to be of much value. If any are, their appearance in Google’s archives is likely to bring long-lost copyright owners out of the woodwork to claim the proceeds. They can then sell the digital rights to their books to firms other than Google, increasing competition.

The critics’ second charge is more worrying. In effect, the agreement creates a legally sanctioned cartel for digital-book rights that could artificially inflate the price of library subscriptions. In some other areas, such as the music industry, such copyright registries are required to sign formal pledges that they will not abuse their dominant positions in this way. The Google agreement contains no such promise.

Yet that is not a reason to reject it. After all, Google has a big economic incentive to ensure that its online library is widely available: it makes most of its money from search advertising, so the more people that use its services, including the online book archive, the better. It also has a legal incentive to watch its step. The agreement stipulates that institutional subscription prices must be low enough to ensure that the public has “broad access” to digital books, while at the same time earning market rates for copyright owners. So if lots of libraries refuse to sign up for Google’s service because it is too costly, the company could be slapped with a lawsuit.

Admittedly, such safeguards are not watertight and other antitrust concerns could surface over time in this brave new digital world. But the theoretical dangers these pose should be weighed against the very real and substantial benefits that a comprehensive digital library will create. That is why the court should approve the Google agreement, while at the same time giving stern warning to its signatories that they will be subject to intense regulatory scrutiny for the foreseeable future. If the court rejects the deal, much potentially useful information will remain, quite literally, a closed book.