The BRR : A U.S. Class CartelPeter Brantley for the Open Book Alliance and the Internet Archive

Open Book Alliance Promote fair and flexible solutions aimed at achieving a more robust and open system for digital books online. We are contra Google, AAP and the AG’s effort to monopolize the access, distribution and pricing of the largest digital database of books in the world.

OBA members (Sept 2009)AmazonAmerican Society of Journalists and AuthorsCouncil of Literary Magazines and PressesInternet Archive MicrosoftNational Writers UnionNew York Library Assoc.Small Press DistributionScience Fiction & Fantasy Writers of AmericaYahoo!

BRR as a cartelWe believe the BRR functions like a cartel ... Formed through a union of two class parties combined into a single larger class –Sub class of authorsSub class of publishers

BRR does 2 different thingsBRR functions as –Rights RegistryBusiness Agent

BRR ill-matched The BRR can only negotiate on behalf of Registered Rightsholders. It cannot license orphans or any other unregistered works to other parties (up to 50 percent). Google exploits all books via U.S. class action.

No orphan competition BRR can only externally negotiate on behalf of registrants but can develop new business models with Google without any constraint. Competitors would be unable to access the orphan works and therefore cannot develop products and services matching database in comprehensiveness.

Licensing subscriptions A comprehensive collection – {claimed + unclaimed} books – is compelling for both search and subscription offerings. With Google granted a monopoly to unclaimed works, they would exercise a monopoly over subscriptions for the most comprehensive collection available.

BRR’s copyright “gift” The BRR does not hold rights for traditional print (hardback / soft cover) publishing. It would hold rights over any new initiatives, including e.g. downloadable ebooks, pay-per-view services, print on demand, etc., that could disrupt existing publishing business.

Impact on publishing Print on Demand permit publishers to abandon traditional printing patterns. Publishers could choose to sell e- / p- books only through the BRR, so – they could collude to exert monopoly pricing over their titles (e.g. boycott Amazon, Indigo, etc).

Pricing coordination Because rightsholders combine their interests into a single Book Rights Registry, Google is empowered to coordinate pricing amongst thousands of competitors for optimal return. Almost certainly a per se violation of the U.S. Sherman Antitrust Act; else, then under the “rule of reason”.

No incentive for opt-outRightsholders could individually opt-out ... but there is no incentive for them to do it! One is unlikely to obtain better revenue cf. to a cartel maximizing prices algorithmically for all competitors with omniscient information.

Price fixing inefficientEven if one were to argue that collective pricing of orphan works was necessary ...Nothing supports cartel-based price-fixing among registered Rightsholders. (N.B.: Google could have immunized itself by requiring that individual rightsholders specify their own pricing.)

No precedent U.S. oversight of ASCAP and BMI is a poor comparison to the BRR’s business function. The DOJ has imposed rigorous conditions on those entities and has continued to monitor their compliance even decades later with many reforms; no similar oversight has yet been proposed for the BRR.

Monopsonist The BRR is bound to Google as the exclusive distributor for orphan works – even if market conditions suggested Google was a poorly performing partner. Google would become a monopsonist for commercialization of all orphan works. (monopsonist = 1 buyer, many sellers).

Possible cure Modification of the proposal might begin with compulsory licensing of the database, possibly combined with new orphan works legislation or other remedies. The course of conduct here, coupled with market entry impediments, such as competitors’ inability to secure orphan works, makes compulsory licensing particularly appealing.

BRR as a rights registry BRR also functions a rights registry. Book rights data recording functions should be defined by cross country regulations. Arrow is one good start at this. (Books are inherently international works).

BRR should be interoperableWe need not simply U.S. registries ... and EU registries, and African registries, and ... . We need a single registry framework, or interoperable registries, able to exchange stipulated data elements using machine statements (e.g. XML).

Attributes not assertionsFocus on rights attributions – Published in the U.S., 1964, (CR) not renewed; Spanish edition published 1965; not renewed.Not on rights assertions – Public domain in the U.S.. The organization using digital content is best placed to make a risk determination based on available rights information.

Settlement should not pass“ The future of public access to the cultural heritage of mankind embodied in books is too important to leave in the hands of one company and one registry that will have a de facto monopoly ... .” Pamela Samuelson Professor of Law and Information UC Berkeley

Thankspeter brantley co-founder, Open Books Allianceand director, bookserver project internet archive the presidio, san francisco, ca @naypinya (twitter)peter@archive.org