SOURCE: The American Consumer Institute

The American Consumer Institute

February 05, 2010 16:07 ET

ACI Agrees With DOJ -- Google Book Settlement Poses Anticompetitive Risks

WASHINGTON, DC--(Marketwire - February 5, 2010) - The following is a statement from The American Consumer Institute (ACI):

We applaud yesterday's statement by the U.S. Department of Justice expressing its problems with the proposed Google Book Search Settlement, stating that the settlement is "an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the court in this litigation." We wholeheartedly agree.

Because the deal would give Google the first and only online search book deal and allow Google to use some authored works without compensation, and because Google already has a formidable share in the search and search advertising markets, the settlement would hand Google a market advantage that other competitors cannot overcome. We believe that these anticompetitive risks outweigh any public benefits.

"Considering that this process began with Google allegedly violating author copyrights by scanning and putting books online, it would seem that the current deal is a reward for illegal behavior when punishment is in order," noted Steve Pociask, president of the American Consumer Institute. "For other firms to compete against Google, they would need to violate copyright laws, be sued and settle on their own, losing valuable first mover advantage. The public benefit of an online book database should not be a justification for permitting illegal activities and using the court's class action process to cement a profitable business venture."

The American Consumer Institute believes that Google should be required either to: 1) destroy the copyrighted materials that it illegally copied; or 2) provide all would-be competitors the same materials that were illegally scanned and give all competitors the same settlement terms as Google. Then all competitors would be free to add works, differentiate their product and customize their service offerings to the public. "Our approach would put these author's works online for the benefit of the public, without sacrificing the benefits of market competition," added Pociask.

About ACI

For more information about the Institute, visit www.theamericanconsumer.org.