October 19th, 2009

Success or failure equals government intervention

Posted by Doug Hanchard @ October 19, 2009 @ 12:32 PM

Categories: Antitrust, Congress, Courts, Elections, Google, Google Book Deal, Intellectual Property, International, Microsoft, Regulations, SEC, Transportation

Tags: Financial, Industry, Government, Vertical Industries, Financial Accounting, Finance, Doug Hanchard

The economy is in complete disarray and recovery efforts cost taxpayers everywhere. It will be a small fortune (a few trillion dollars) in long-term debt that governments are now incurring. Government is not at fault right? They are not the cause of economic wealth or disaster - right? What role do they really play? Turns out the answer is plenty.

Daily, the press fires out news about bailouts everywhere in the auto sector and financial marketplace, institutions that caused their own undoing are putting us in asset devaluation and debt never seen before. If you’re a successful company, don’t worry, the government sector is going to still tear your company apart. Microsoft is being micro-managed by the EU ,and the U.S. government make current financial regulators look like amateurs. What industry or company is on a government hit list?

If you’re successful, then rest on your laurels, shrug your shoulders and begin to fall flat on your face, just blame everyone else for causing the problems when the company falls apart. As a bonus, don’t worry the government will come bail you out. If you’re the biggest and most successful and financially sound, the government still wants to get into your books and tell you what your business can do and hand over some of the business to your competitors.

Why didn’t the government do that with GM? Shouldn’t they simply have handed over some of the business to Toyota, Ford and others? In a sense with Chrysler, they did and packaged up a deal and prayed that FIAT didn’t blink before they signed on the dotted line.

I wonder if Cisco is going have to worry some day that it will have to hand some of its business over to Juniper, Ciena, Brocade or other network gear companies? Read the rest of this entry »

September 21st, 2009

Justice Dept. devastates Google Books settlement, as the parties rush to the back rooms

Posted by Richard Koman @ September 21, 2009 @ 4:00 AM

Categories: Google Book Deal

Tags: Google Inc., Settlement, U.S. Department Of Justice, Proposed Settlement, Registry, Government, Vertical Industries, Litigation, Corporate Law, Free Trade

The big news from the Justice Department’s critique of the Google Books deal is that are “frantic negotiations going on in back rooms right now,” New York Law School prof James Grimmelan told the New York Times.

This we know because DOJ’s statement to the court tells us:

The United States has been informed by the parties that they are continuing to consider possible modifications of the Proposed Settlement to address the many concerns raised by various commenters and by the United States in its discussions with the parties.

The letter is a game-changer, the one document that is sending Google and its partners into feverish negotiation, after withstanding a torrent of objections. DOJ’s letter to the court then goes on to explain why, unmodified, this deal is a loser:
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September 10th, 2009

Google says it would make books available to Amazon, Copyright Office says deal 'usurps' Congressional role

Posted by Richard Koman @ September 10, 2009 @ 9:05 AM

Categories: Copyright, Google Book Deal

Tags: Google Inc., Settlement, Copyright Law, U.S. Congress, Copyright Office, Amazon.com Inc., Competitior, Litigation, Business Operations, Richard Koman

Google’s David Drummond is making promises on the fly during today’s House Judiciary Committee hearing. He just announced that Google would make books covered under the settlement available to competitors like Amazon or Microsoft on a reseller basis — and Google would share the majority of their revenue.

Asked by an approving Chairman John Conyers for Amazon’s reponse, Amazon’s Paul Misener explained that Amazon didn’t much cotton to the idea of having to go through Google instead of purchasing rights directly.

In his oral comments, Misener made the point that the deal is in fact exclusive (note, all quotes are real-time paraphrases, not exact):

The settlement gives Google exclusive, liability-free rights to orphan works. It goes further, it releases them from liability not just for past acts, but prospectively. Google gets everything. What does a competitor get? Nothing, except what is opted into the Registry by rights holders. Competitors are limited only to rights holders who have opted in their works. Ggets everything less some opt-outs. competitiors gets nothing plus soome opt-ins. And orphans by definition don’t make an option. They don’t opt out of the google corpus and they don’t opt in to the competitor corpus.

In her opening statement, Register of Copyrights Marybeth Peters argued that the settlement largely usurps Congress’s role in making copyright law. “To allow a commercial entity to sell such works without consent is an end-run around copyright law as we know it,” Peters said.

While aspects of settlement have merit, key parts are fundamentally at odds with the law. They impinge the exclusive rights granted to copyright holders. The settlement agreement creates a compulsory license and covers behavior not part of the dispute. It would alter the landscape of copyright law — which is the purview of Congress, not the courts. It would jeopardize the efforts of Congress to craft comprehensive legislation. In the view of the Copyright Office, the settlement proposed by the parties would encroach on responsibility for copyright policy that traditionally has been the domain of Congress.

In addition, Peters said, the settlement has “serious international implications” that could impact U.S. obligations in treaties with foreign governments.

September 9th, 2009

House Judiciary considers Google Books deal Thursday

Posted by Richard Koman @ September 9, 2009 @ 6:02 PM

Categories: Google Book Deal

Tags: Google Inc., Settlement, Litigation, Business Operations, Richard Koman

The debate over the Google Books settlement is finally getting some attention where it belongs - Congress. Thursday, the House Judiciary Committee will bring its special brand of hot air to the debate. The full committee holds a hearing on “Competition and Commerce in Digital Books.” The speaker list seems to me a bit heavily weighted to the Google forces, but perhaps that is so the congressmen can tell the dealmakers what they think(?).

Speakers include: Google counsel David Drummond, Marc Maurer of the National Federation of the Blind, Paul Aiken of the Authors Guild; John Simpson of Consumer Watchdog and Paul Misener of Amazon; and Marybeth Peters, register of copyrights of the U.S. Copyright Office, law professor Randy Picker (who has called for the court to explicitly not immunize the parties against antitrust claims) and David Balto of the Center for American Progress (who has argued that the deal is good for consumers.)

Reuters has a report on what Google’s Drummond said in prepared testimony:

Drummond said Google was “fully compliant with copyright law,” and access to online books could revolutionize research in schools without major libraries. … “We believe anyone who wants to re-use abandoned works should have a fair, legal way to do so. In our view, the settlement helps.”

While not speaking tomorrow, the Open Book Alliance, headed by the Internet Archive and including most of Google’s competitors, sent a letter to the Committee (PDF) detailing its criticism:
Read the rest of this entry »

July 6th, 2009

DOJ confirms Google Books investigation

Posted by Richard Koman @ July 6, 2009 @ 11:20 AM

Categories: Antitrust, Google Book Deal

Tags: Google Inc., Settlement, U.S. Department Of Justice, Litigation, Business Operations, Richard Koman

Is the Justice Department actually investigating the Google Books deal?

Yes, the department confirmed to the federal judge reviewing the class action settlement. It is looking into whether the deal violate the Sherman Antitrust Act, The New York Times reports. In a letter to the judge, William Cavanaugh, a deputy assistant attorney general, said:

At this preliminary stage, the United States has reached no conclusions as to the merit of those concerns or more broadly what impact this settlement may have on competition. However, we have determined that the issues raised by the proposed settlement warrant further inquiry.

Is this a serious development? Oh, yeah. Antitrust lawyer Gary Reback told the Times:

This is the next step in the notion that this is a serious issue, so serious that the Justice Department needs to notify the court. It sets the stage for the department to come into the court to present a problem.

The Internet Archive, which has been leading the charge against the settlement, chiefly on the grounds that it gives Google an exclusive right to publish so-called orphan works, without fear of litigation, is “heartened” by the news, Peter Brantley, the director of access for the Internet Archive, said.

June 9th, 2009

Justice inquiries into Google Book Deal show it's all but dead

Posted by Richard Koman @ June 9, 2009 @ 11:19 PM

Categories: Google Book Deal, Justice

Tags: Google Inc., Antitrust, U.S. Department Of Justice, Corporate Law, Litigation, Security, Business Operations, Richard Koman

Now, there can be no question that the Google Book Deal is in serious trouble. The New York Times and Wall Street Journal report. It seems the Justice Department has been really ramping up their inquiry into the deal.

The Justice Department has sent the requests, called civil investigative demands, to various parties, including Google, the Association of American Publishers, the Authors Guild and individual publishers, said Michael J. Boni, a partner at Boni & Zack, who represented the Authors Guild in negotiations with Google.

“They are asking for a lot of information,” Mr. Boni said. “It signals that they are serious about the antitrust implications of the settlement.”

The Journal adds that the civil investigative demands are the “strongest sign yet that the Justice Department may seek to block or force a renegotiation of the settlement.”

How dead is this deal?

“The government must be a lot further along with this than people thought,” said Gary Reback, a lawyer who wrote a book on antitrust. “Now, there is a big boulder sitting on the judge’s desk. It is hard to see the judge approving this if a government investigation is pending.”

June 2nd, 2009

Google drops the other shoe, plans to sell online books

Posted by Richard Koman @ June 2, 2009 @ 10:34 AM

Categories: Google Book Deal

Tags: Google Inc., Publisher, E-books, Search, Branding, Personal Technology, Marketing, Richard Koman

And so the Googlization of the world continues. Google announced it would enter the e-book market by letting publishers sell online-access only to their books via the great search engine, as the Wall Street Journal reports. This is key:

Google spokesman Gabriel Stricker said consumers would not be able to download books in the same way Amazon’s customers can buy copies of specific titles and store them on their Kindle. Instead, people who access books through Google would be able to read titles online and temporarily cache them in their Internet browsers so they could also read them offline.

And this is also interesting:

Google said it would allow publishers to set their own prices, although the company reserved the right to discount titles at its own expense.

In other words: the books go - probably as html not pdf - onto Google servers, Google collects all manner of usage stats, Google (not the publisher) sets the retails price, conceivably Google runs ads along the content, at a minimum it promotes the books in its search results.

I remember awhile back when newspaper companies were eagerly signing up to have Google and Yahoo take care of their online advertising. I thought that was a bad idea because they were basically handing their customer relationships off to giant multinationals — and paying for the privilege.

Amazon on the other hand preserves the publisher’s branding, cover design, page presentation, and the integrity of the book as a whole unit. More to the point, it preserves the publishers’ relationship with their customers.

Oh, and by the way, this is being spun as a way to make publishers happier about the Book Search Settlement, which would give Google exclusive access to publishers’ copyright work without having to license it. Publishers should be less than thrilled at this development.

May 4th, 2009

Google Books powered by patented scanning technology

Posted by Richard Koman @ May 4, 2009 @ 8:03 AM

Categories: Google Book Deal

Tags:

Many, many readers have questioned how Google Book Search can be anticompetitive, as the Justice Department is investigating and as I argued here and here.

The pro-Google argument is well summed-up in this comment:

The public having access in some manner to this body of books is a good thing. It is even good for the authors. If nobody else is willing to do it, which is the real issue, why does this mean that Google is at fault? MS and Yahoo could do it but they don’t want to do it. Does this mean that Google is doing wrong because they did it?

I’d say Google is doing a public service and I’m dubius that this impacts their bottom line enough to matter or Yahoo and MS would be doing the same thing. Both have looked at this and decided it wasn’t a worthwhile investment.

Now, NPR reports, in fact, no one else can do what Google is doing. That’s because Google has acquired a patent that conquers one of the main difficulties with scanning: book bindings cause curvature of the type on the pages, which makes OCR of book scans very difficult.
Read the rest of this entry »

April 30th, 2009

Google, Books and the Nature of Evil

Posted by Richard Koman @ April 30, 2009 @ 12:43 PM

Categories: Google, Google Book Deal, Government technology, Microsoft

Tags: Google Inc., Books, Litigation, Financial Accounting, Business Operations, Finance, Richard Koman

The proposed class-action settlement between Google and the authors’ and publishers’ groups would create a wholly new way of dealing with copyright and royalties. For some years, Google has been scanning books by the boatload. Not just old, public domain works as many academic and nonprofits projects had been doing for years, but books fully protected by copyright, as well as so-called orphan works — a concept I’ll explain below.

When authors and publishers screamed bloody murder and filed a huge class-action suit on behalf of pretty much all writers - at least all U.S. writers - Google’s response was surely brilliant. Here’s Google, clearly and obviously violating copyright, and the solution is a settlement that allows Google to continue its scanning operations, monetize them without fear, leverage the contents into its market-dominating search engine — and create a system that protects it from infringement claims from unknown copyright holders.

I’ve been posting about this for the last day or two and quite a few people have questioned just exactly is wrong with this. The short answer is that it gives Google a monopoly in literature, in the broadest sense of the word. Beyond this, the deal - which now looks like it may well be scuttled by the Justice Department - is merely indicative of increasingly troublesome trends within Google:

The company has become a true believer in its own goodness, a belief which justifies its own set of rules regarding corporate ethics, anti-competiton, customer service and its place in society. Tellingly, Google has set aside its “Don’t Be Evil” motto at the very time in which its actions increasingly look evil — all the more so for it protestations that it needs the dominance it claims for the good of the public, the good of the Internet, the good of the world.
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April 29th, 2009

Google on the defensive as book deal starts to come apart

Posted by Richard Koman @ April 29, 2009 @ 11:04 AM

Categories: Google Book Deal

Tags: Google Inc., Book Search, Litigation, Business Operations, Richard Koman

With the Google Book settlement showing signs of coming apart at the seams, Google has taken to its blog to make its case for the deal.

Background: The settlement, reached in October between Google, the Authors Guild and the Association of American Publishers, would create a $125 million fund that authors would be paid out of. The authors and publishers sued in a 2005 class action over Google’s giant book-scannning operation, which has been scanning both public domain and copyrighted works.

Opponents say the deal gives Google a monopoly on online book access.
Read the rest of this entry »