Wednesday, July 15, 2009

Article: Antitrust and the Google Books Settlement: The Problem of Simultaneity

The 26-page paper is available for download (free). I'm putting it on my "to read" list and hope to get to it soon.

By the way, Eric Fraser holds both an MBA and a JD from the University of Chicago.

Fraser, Eric M., Antitrust and the Google Books Settlement: The Problem of Simultaneity (June 10, 2009). Available at the Social Science Research Network:

Google Books represents the latest attempt at the centuries-old goal to build a universal library. In 2004, Google started scanning books from libraries around the world. Although it made copyright licensing agreements with some publishers, it did not obtain permission from each rights-holder before scanning, indexing, and displaying portions of books from the stacks of libraries. Unsurprisingly, authors and publishers sued for copyright violations. Google settled the class action lawsuit in a sweeping agreement that has raised suspicion from librarians, users, and the government. In this paper, I analyze the antitrust and competition issues in the settlement agreement. I find that the simultaneous aspects of agreements and pricing pose serious antitrust problems. The settlement effectively gives Google simultaneous agreements with virtually all the rights-holders to in-copyright American books. It also requires that Google set prices for books simultaneously. In a competitive market, both agreements and pricing would occur independently. Under current law, however, no potential competitor can make agreements with the rights-holders to orphan works. The simultaneity, therefore, concentrates pricing power, leading to cartel pricing (a problem under § 1 of the Sherman Act) and monopolization (a § 2 problem).

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