Google free to set $0 prices – Modified Book Settlement

The biggest modification in the Settlement is that Google can now discount book prices as much as they want – as long as they continue to pay 63% of the undiscounted List Price to the registry for rightsholders.

Discounting off Consumer Purchase List Price.

Google will now have an unlimited right to discount the List Price of Books for Consumer Purchase, so long as it continues to pay 63% of the undiscounted List Price to the Registry for Rightsholders.

The Registry may also authorize Google to make special offers of Books for Consumer Purchase at reduced prices from the List Price and pay 63% of the discounted List Price to the Registry for Rightsholders. Claiming Rightsholders (and the fiduciary for unclaimed Books), however, will be notified of this reduced price proposal and can disapprove it for their (or unclaimed) Books. (ASA Sections
4.5(b)(i) and (ii))

This is in the Supplemental Notice and not discussed as a big change – wonder why?

The other really interesting change is that book prices will be set via an algorithm and no one except rightsholders will be told the price -

Settlement Controlled Pricing.

The Amended Settlement clarifies that the Pricing Algorithm used to establish the Settlement Controlled Prices for Consumer Purchase will be developed to simulate the prices in a competitive market and that the price for a Book will be established without regard to changes to the price of any other Book.

The Amended Settlement also clarifies that the Registry will not disclose the Settlement Controlled Price for a Book to anyone other than the Book’s Rightsholders. (ASA Sections 4.2(b)(i)(2), 4.2(c)(ii)(2) and 4.2(c)(iii))

Google’s Stance

Here’s a post on the modified Google Books Settlement from Google, which includes -

The changes we’ve made in our amended agreement address many of the concerns we’ve heard (particularly in limiting its international scope), while at the same time preserving the core benefits of the original agreement:

opening access to millions of books while providing rightsholders with ways to sell and control their work online.

There was a public conference call at 9:15 pm Pacific Time on a Friday Night – Doesn’t seem the best time.

Review of Reactions to Modified Settlement

News Sources

  1. ResourceShelf has an excellent post covering the modified settlement including Professor James Grimmelmann’s conclusion that ‘Google will still have exclusive access to a market segment that no one else can enter’ -

    My instant reaction is that it makes a number of meaningful, if modest, improvements, but leaves unaddressed the central issue (anti-trust) that led me to worry about the settlement in the first place.

  2. ZDNet just covers the changes and Open Alliance’s reaction.
  3. TeleRead points out that rightsholders may make their work available for free, and that revenue models are limited to – (Current) Preview and Purchase Books, Instituional Subscriptions, Libraries 1 terminal free access. (In future) Print on Demand, File Download, and Subscriptions.
  4. Search Engine Land has a great summary of the Midnight Conference Call. Including the fact that perhaps Google gets exclusive access to orphan works -

    If the parties are correct, the Registry will lack the ability to provide competitors with licenses that will allow them to offer to the public anything like the full set of books Google can offer if the Settlement Proposal is approved.

  5. FT.com has good coverage.

Why is no one highlighting the fact that now Google can sell $0 ebooks?

Predictable Allies:

  1. There’s a Google main page that has votes of Support (although this was for the original settlement). 
  2. Author’s Guild and Publishers support the settlement.

Predictable Enemies:

  1.  Open Book Alliance are against it.

What are the other Main Changes?

You can read the list of changes yourself. Here is a summary -

  1. Only books either registered in US Copyright Office or published in UK, Australia, or Canada. Rightsholders from those 3 countries join the case and the Board of the Book Rights Registry. 
  2. Orphan Works – Book Rights Registry will hold revenue and search for them and after 10 years give money to non-profits etc. Nothing about ways in which Google intends to use Orphan Works other than selling them.  
  3. An amendment to let Amazon, Barnes & Noble sell out of print books and orphan works and give 67% to the rightsholders and keep majority of remaining 37%. This is hilarious.
  4. Removes the ‘Most Favored Nation’ clause.

It seems like Google went 25-35% of the way they needed to and are still trying to push through something pretty beneficial to them.

Predictably, the Open Book Alliance thinks Google are performing a sleight of hand. They outline their case. Peter Brantley of the Open Book Alliance had this to say -

Google are … attempting to distract people from their continued efforts to establish a monopoly over digital content access and distribution.

Four Questions

The main advantage i.e. exclusive access to orphan works is still present – Why isn’t that addressed?

Where’s the advertising covered?

Why does Google want to be able to discount books without restrictions?

Why does Google want to hide book prices?

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