Last January Google threw a post-inauguration party in Washington to celebrate the election of President Barack Obama. The internet giant had good reason to be happy. Google’s top executives had been early backers of Obama’s campaign and Eric Schmidt, the chief executive, was one of four Googlers on the president’s transition team.
As if to underline their closeness, Obama even used Google’s YouTube to address the nation before his inauguration. At the party, A-list geeks such as Facebook co-founder Chris Hughes and Craigslist’s Craig Newmark mixed with B-list celebrities Jessica Alba and John Cusack and raved it up to 1980s tunes.
Until a few years ago Google had largely ignored Washington. Now Schmidt is one of the few chief executives still welcome in the White House. But the honeymoon period may soon be over. In the coming months Google will face a series of challenges as its rivals and critics lobby against its enormous dominance on the net and its ambitions elsewhere. The first test comes next week over Google’s controversial plans to build the world’s biggest online library.
Google’s self-avowed mission is to “organise the world’s information and make it universally accessible and useful”. To that end it has been scanning library books and has so far amassed digital copies of more than 10m titles — including 500,000 volumes held by the Bodleian in Oxford. In 2005 the Authors Guild and the Association of American Publishers sued for “massive copyright infringement”. The two sides reached agreement in October 2008, with Google promising to pay the Authors Guild $125m (£76m) to set up a way of sharing profits made by Google Books with copyright owners and offer an opt-out to objecting authors and publishers.
However, as details and the scale of Google’s ambitions reached a wider audience objections flooded in from authors, academics, librarians, public interest groups, rivals — and the Justice Department. On November 9, Judge Denny Chin, who sentenced the disgraced financier Bernard Madoff to 150 years in prison, will hear Google’s latest attempt to appease its critics. Legal experts are not expecting an easy agreement.
Ben Edelman, assistant professor at Harvard Business School, said: “The honeymoon is over. Folks in all walks of life are realising that Google is far more powerful than they thought.”
Edelman said books was just one, and far from the largest, area of concern he had with Google but it would prove a test case for the company and had opened it up to wider criticism than it had ever faced before.
“Books got a new class of people interested in Google,” he said, “a group who had been prepared to like Google. But they didn’t much like its position that it was Google’s privilege to scan all their books.
“Imagine if you or I went into a library and scanned a million books. You’d be taken out in handcuffs,” said Edelman. “For Google to get this unique right and for it to be able to continue to use the fruits of this unauthorised scanning, that rubbed people up the wrong way. It’s like a school bully stealing your ice cream and then, when the teacher catches him, he gets to eat it anyway. It doesn’t feel fair, does it?”
The books settlement has triggered an international backlash. It is supposed to be limited to the US but works by non-American writers have been scanned and are causing problems. China has objected to the books deal and may start legal action. According to the state broadcaster CCTV, Google has digitised nearly 18,000 books written by more than 570 Chinese writers, most of whom are unaware of what has been done. Last week the People’s Daily accused Google of “malicious revenge” after the books section of its website was in effect blocked — claims that Google said were “wrong and without merit”.
Ahead of last month’s Frankfurt Book fair, Angela Merkel, the German chancellor, weighed in on the debate saying that European Union copyright had to be protected. The German and French governments have filed objections to the original American court settlement.
At the fair, tempers ran even hotter. Roland Reuss, a literature professor from Germany’s Heidelberg University, derided Google’s claims that it was giving access to books that were otherwise hard to obtain as “just a whole garbage of hysterical propaganda”. The European Commission is reviewing copyright law, a move triggered in large part by Google’s book plans.
Santiago de la Mora, Google’s director of book partnerships in Europe, said: “The settlement is offering to contribute to one of the big problems of the publishing industry, bringing books that are out of print back to life. From an author’s perspective, the worst thing that can happen is for your book to go out of print: you cease to be read and you cease to make money. From a publisher’s point of view, the economics of the publishing world made it so that a lot of publishers were forced to let those titles go out of print. The settlement brings these books back to life and this can only be good for all parties.”
De la Mora said the agreement was “ground-breaking” and that Google had not infringed copyright law. “We have always complied with copyright law in the US and elsewhere. What’s important about the settlement is the essence of non-exclusivity. You are free to come to Google or not. This is how we were built, giving you the choice. Publishers have that choice as well.”
James Grimmelmann of New York Law School said so many parties were looking at the book deal that a settlement could be problematic. His main concern was over the precedent that any agreement might set. “The settlement is worrisome not to the extent that it validates the original scanning but in that it creates something in excess of the original submission.”
He said Google’s plans to sell books were “never on the table during the original scanning” and that it was not yet clear what Google intended to do in future with all this new data. Grimmelmann said the case threatened to set a dangerous legal precedent for firms to force disparate parties “into a room together and say all of you are going to give up your rights as part of a new deal that we want to make”.
In Washington, the fracas over books is likely to be just the start, according to Edelman. The increased scrutiny of Google means that more far-reaching anti-trust investigations into questions about whether its dealings with advertisers are appropriate are now more likely. Such an investigation would strike at the heart of Google’s business. In America its share of the advertising market for search is more than 70%.
“That’s the crux of the problem. When companies get a market share of more than 70%, they get a little bit arrogant. [Google] is beginning to initiate practices that rightly cause concern,” said Edelman.
For Google, next week’s books ruling may well open a new chapter in the story of its Washington romance.
YouTube is next in the line of fire
Authors and publishers are not the only ones up in arms over Google’s attitude to copyright. Media companies are angry that their material keeps appearing on YouTube, which is owned by the search giant, writes James Ashton.
With an astonishing 20 hours of video being loaded on to the website every minute, media companies are concerned their copyright is regularly being breached and they cannot stop the tide. Numerous clips from their shows are posted on the website by fans without their permission.
At the same time, Google, which paid $1.6 billion (£1 billion) for YouTube three years ago, is still working out how to make it profitable. Reluctant to get into the expensive business of pre-screening videos, the company’s answer to both problems is Content ID.
This pattern-recognition technology enables YouTube to identify clips if rights owners give them an official copy to search against. It has built up a database of 100,000 hours of content to check against YouTube’s vast library. It is a big job. Content ID can search through 100 years of video per day but that is still a drop in the ocean. It would take someone more than three years to watch all the videos that are posted on YouTube in a single day.
When it finds illegal clips, YouTube gives rights owners a choice: it can take down the clip or put advertising round it, generating income for both parties. One-third of YouTube clips that generate an income were tracked down through Content ID. The website is likely to be profitable in the “not-too-distant future”, according to Google.
YouTube would like to avoid a repeat of the fallout with PRS For Music (formerly the Performing Rights Society), which has 60,000 industry members. A spat over payments led the company to take down thousands of music videos.
There are signs that relations with broadcasters are warming. Channel 4 recently agreed to put most of its programming archive on YouTube. But a $1 billion copyright lawsuit filed by the Premier League and Viacom, producer of MTV and South Park, shows little sign of being abandoned.
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