Justice Dept. Scrutinizes Google Books Settlement For Possible Antitrust Violations

The U.S. Department of Justice is concerned that Google’s $125 million settlement could present antitrust issues by giving the search giant too much control over licenses to millions of books, NYT reported, citing unidentified sources who claimed to be briefed on the inquiry. (Ed. note: WSJ actually broke the story.)

In October, Google (NSDQ: GOOG) finally thought it had put the long-standing class action lawsuit with the Authors Guild and the Association of American Publishers over its Google Book Search behind it. Under the terms of the settlement, Google has the right to display the books online and sell access to individual works. For example, Google could offer paid subscriptions to its entire collection to libraries and other institutions.

While Google agreed to share the revenues with the publishers and authors, libraries are worried that Google would have solitary and overwhelming control over access to “orphan books” — titles whose authors and rights-holders have essentially abandoned. Since there’s no other online entity with access to these abandoned books, Google could effectively raise prices for access to the collection and libraries would have nowhere else to go for them.

At this point, the DOJ is not taking any specific action aside from hearing complaints about the Google Books Search deal. Separately, a federal district court judge in New York, who is overseeing the settlement, has pushed the deadline for authors to remove their works from the settlement to September. The original deadline was May 5. The authors and their heirs said they needed more time to examine the agreement.