Relaxing whilst doing Competition Law is not an Oxymoron

Archive for March 2nd, 2010

Google Books Settlement- It’s the search market, stupid!

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As in most instances, this snowclone is a bit of an oversimplification: to be sure, the GBS brings to the fore extremely interesting issues such as those related to copyright law, privacy, or the function and limits of the class action mechanism, which are unrelated to the competitive impact of the GBS on the search market. However, also like in most instances, it helps us not lose sight of the important stuff. Indeed, the antitrust objections to the settlement raised by the DOJ other than those dealing with the search market (fundamentally those related to the ASA’s pricing system) seem to me somehow weak (see first comment to this post below).

As Gary Reback –one of the most prominent leaders of the opposition to the settlement- noted in a blog post last week: “at bottom, the Google Book Settlement is not really about books. It’s really about search, the most important technology in the new economy”. The transcript of the fairness hearing held last week conveys the impression that the DOJ shares the same main concern.

I’m no expert on the GBS and wouldn’t dare to comment on all of its aspects here. However, some of the issues raised in Reback’s post caught my attention.

Reback’s post points out that the search market, allegedly dominated by Google (how do you define the search market? Note, for instance, that on the fairness hearing AT&T claimed to be Google’s competitor because of its Yellow Pages), is “difficult to enter because of powerful network effects and scale characteristics” . He then insists on how access to books covered by the settlement would grant Google a tremendous competitive advantage. The said advantage would stem from the fact that Google would be improving its ability to support “obscure” or “tail queries” by virtue of its “exclusive” (?) access to in-copyright books whose authors are unidentified (that’s what some have labeled as the “orphan works monopoly”, a term that not only assumes that there exists a market for “orphan works” and that competitors would be barred from accessing to such works, but which also, by putting together the words orphans and monopoly, adds a bit of Dickensonian dramatism to the debate). Read the rest of this entry »

Written by Alfonso Lamadrid

2 March 2010 at 10:11 am

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