Raises lots of questions about the nature of competition in the book world
SkyRiver v. OCLC
Whose catalog is it, anyway?
But first, a bit of history ...
Alexandria Herald Ptolemy II Announces Plan for Universal Library Open Scrolls Alliance Decries Monopoly ALEXANDRIA, Feb. 8, 286 B.C.E. (via Rome) – Pharaoh Ptolemy II today announced the founding of a universal library in Alexandra “to make available every scroll in the world.” Critics outside Egypt immediately condemned the proposal as a ploy to build up Alexandria’s tourist industry by forcing scholars to come to the city. Excerpt from
Tewkesbury Times Manuscript Mania! Gutenberg Inks Deal with Cloister Consortium TEWKSBURY, Feb. 8, 1438 – Bible Baron Johannes Gutenberg today announced an agreement with a consortium of major cloisters to “print” their entire collection of illuminated manuscripts, using his radical new invention Movable Type. Prices for gold leaf and parchment plunged in late trading as speculators dumped their stocks. Excerpt from
So, is there anything new under ye olde helios ? Flash forward to 2004 ...
The principal battle in the suit was about the nature and scope of copyright laws including ownership and fair use issues.
But the 2008 settlement led to a firestorm over the scope of federal class action law.
The Department of Justice entered the fray at that point and launched an antitrust investigation into the settlement’s impact on “competition.” (It continues.)
Cites to the DOJ’s 2 Statements Statement of Interest of the United States of America Regarding Proposed Class Settlement, Doc. Item 720, filed 9/18/09, available at http://www.justice.gov/atr/cases/f250100/250180.htm Statement of Interest of the United States of America Regarding Proposed Class Settlement, Doc. Item 922, filed 2/4/10, available at http://www.justice.gov/atr/cases/f255000/255012.htm
“ Breathing life into millions of works that are now effectively dormant, allowing users to search the text of millions of books at no cost, creating a rights registry, and enhancing the accessibility of such works for the disabled and others are all worthy objectives.”
“ The rights granted to Google under the ASA confer significant and possibly anti-competitive advantages on a single entity...”
“ ... Google would remain the only competitor in the digital marketplace with the rights to ... exploit a vast array of works in multiple formats. Google also would have the exclusive ability to exploit unclaimed works (including so-called “orphan works”) without risk of liability. The ASA’s pricing mechanisms ... also continue to raise antitrust concerns.”
The DOJ “has reluctantly concluded that use of the class action mechanism in the manner proposed by the ASA is a bridge too far.”
“ ... the ASA’s collectively agreed-upon constraints on the rightsholders’ relationships with Google continue to raise concerns. In addition, Google’s de facto exclusive access to orphan and rights-uncertain works remains unaddressed....”
Library Associations Expressed Concerns Similar to DOJ’s
The cost of creating ... a repository and Google’s significant lead time advantage suggest that no other entity will create a competing digital repository for the foreseeable future. In the absence of competition ..., the settlement could compromise fundamental library values....
[T]he absence of competition for the institutional subscription service ... makes libraries particularly vulnerable to profit maximizing pricing.
Eric M. Fraser writing in the Stan. Tech. L. Rev. says:
“ The settlement effectively gives Google simultaneous agreements with virtually all the rightsholders to in-copyright American books. ... The simultaneity concentrates pricing power, leading to cartel pricing (a problem under § 1 of the Sherman Act) and monopolization (a § 2 problem).”
Mark A. Lemley, an attorney representing Google in the litigation, has written “An Antitrust Assessment of the Google Book Search Settlement” and finds criticisms by the DOJ and others to be “unpersuasive.”
Einer Elhauge, a Harvard Law Professor who received research support from Google, has written “Why the Google Books Settlement is Procompetitive.”
Innovative alleges that OCLC uses its membership requirements to obtain the agreement, assistance and services of libraries in developing OCLC products such as WorldCat Local, which they are also obligated to purchase, while competitors, such as Innovative, are excluded from what should be competitive procurement opportunities.
SkyRiver filed suit in San Francisco CA, and OCLC moved to transfer it to southern Ohio under 28 USC 1404 (“for the convenience of parties and witnesses [and] in the interest of justice”).
Last week, the Calif. court granted the motion because inter alia “all but two of the libraries that have switched from OCLC to SkyRiver are closer to ... Ohio than ... to California” and are material witnesses.