The Proposed Google Books Settlement: Copyright, Rule 23, and DOJ Section 2
30 July 2010
By Dr. Gregory K. Leonard
In this article from Antitrust, NERA Senior Vice President Dr. Gregory K. Leonard examines the various issues raised by the proposed Google Books settlement. The settlement was proposed in response to the class action lawsuit brought by authors and publishers who claimed that Google has violated their copyrights by scanning their books and creating an electronic database that displays short excerpts without the permission of the copyright holders. The Department of Justice has objected to the settlement on antitrust and other grounds, and its antitrust objections provide a window into the current administration's stance toward antitrust enforcement, especially Section 2 enforcement. Dr. Leonard notes that, if the Google Books settlement is ultimately approved by the court, that could have important implications for how class action settlements are negotiated in the future. The adoption of the class action mechanism in the US legal system was motivated by efficiency. The proposed Google Books settlement, in resolving a purported class action, similarly generates substantial efficiencies. The central question is whether these efficiencies are sufficient to outweigh the objections raised by critics of the settlement.
