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The Book Settlement was rejected.

The most controversial Book Settlement ever proposed was rejected. Judge Chin has made a marvellous decision and he’s a hero – if it’s not clear now, it will be clear to future generations.

First, some documents and links -

1. Judge Chin’s Statement (PDF). 
2. Caroline McCarthy’s Article on Judge Chin rejecting the Book Settlement. 

Next, my take – which is admittedly biased by the fact that I feel every creator should have a right to decide how his work will be used, and who can profit from it.

Key Parts of Judge Chin’s Statement

These paint a very good picture of why the Settlement was rejected.

The question presented is whether the ASA is fair, adequate, and reasonable. I conclude that it is not.

… would grant Google significant rights to exploit entire books, without permission of the copyright owners.

would give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission.

Seriously, Judge Chin is my hero for looking past all the ‘Let’s Save the Penguins’ rhetoric. He recognized that this was basically Publishers etc. ’stealing other people’s work’ with the added bonus that it would create a monopoly for a company that already controls Search.

Would dead authors and people who have forgotten about their work want their work to benefit readers? Or would they rather that their work makes money for corporations?

The corporations are trying to have us believe that they are doing it to save baby seals who will be clubbed to death if the corporations don’t make money from other people’s work. What nonsense - We aren’t the TV generation, and we aren’t going to fall for infantile trickery.

Judge Chin points out that there are lots of benefits of the Settlement and then points out the objections from people opposed to the Settlement. He also gives his take on each (Judge Chin’s take in italics).

1. Adequacy of Class Notice. The Class Settlement has a ridiculously huge ‘class’ – Pretty much anyone who owns a US copyright interest in one or more books and their heirs and successors. A lot of these class holders were not given adequate notice. Judge Chin rejected this argument.
2. Adequacy of Class Representation. Interests of some class members, such as foreign rights holders, are at odds with interests of Publishers and Google. Judge Chin agreed with this -
   

   I conclude that there is a substantial question as to the existence of antagonistic interests between named plaintiffs and certain members of the class.

3. Scope of Relief. The Settlement would create a ‘forward-looking’ business arrangement. Judge Chin agreed with this objection, i.e. the Settlement doesn’t just address Google’s copyright violations, it also transfers certain rights to Google.
   

   As articulated by the United States, the ASA “is an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the Court in this litigation.” (DOJ Statement)

   Judge Chin goes on to say that this is a matter for Congress, that the Settlement would release claims well beyond those currently being contemplated, and that interests of certain rights holders (like academic authors) have not been considered.

4. Copyright Concerns. Violations of the Copyright Act because the Settlement pretty much runs roughshod over existing copyright laws. Judge Chin pointed out that the ‘opt-out’ nature would allow Google to exploit rights of authors who have not agreed to give up their copyright, that copyright is better suited to Congress, etc. The strongest point was that a copyright holder would have to take action to prevent losing rights – which you have to admit is pretty absurd. This is one snippet that is interesting -
   

   it is incongruous with the purpose of the copyright laws to place the onus on copyright owners to come forward to protect their rights when Google copied their works without first seeking their permission.

5. Anti-Trust Concerns. Google can sell subscriptions, sell books, sell advertising in books, and make other uses. While this is non-exclusive, it does, in effect, give Google a monopoly over orphan books and perhaps even digital books. A monopoly over orphan works and the Settlement would further strengthen Google’s dominant position in search. Basically, and these are my thoughts, it would give Google an almost unlimited supply of high quality content to use – content which other search engines would not have. Judge Chin is clearly concerned about the anti-trust aspects and about the advantage this would give Google in search.
6. Privacy Concerns. Google would collect all this information about people who read books. Judge Chin says the privacy concerns are real but not enough in themselves to reject the settlement.
7. International Law Concerns. The Settlement would, according to some foreign authors, violate International Law. Also, it would favor rightsholders from certain nations. Judge Chin sums up his concern here succinctly -
   

   The fact that other nations object to the ASA, contending that it would violate international principles and treaties, is yet another reason why the matter is best left to Congress.

So Judge Chin considers 5 out of the 7 concerns to be valid.

Judge Chin’s Conclusion

Here it is -

In the end, I conclude that the ASA is not fair, adequate, and reasonable.

As the United States and other objectors have noted, many of the concerns raised in the objections would be ameliorated if the ASA were converted from an “opt-out” settlement to an “opt-in” settlement. I urge the parties to consider revising the ASA accordingly.

There couldn’t be a harder slap in the face for the looters. If you want to steal other people’s work – first, you have to get them to opt-in. It’s absolutely delicious – Google thinks everyone’s an idiot and doesn’t understand the huge difference between opt-in and opt-out – Judge Chin just smacked them right across the face.

My take on Judge Chin rejecting the Settlement

Google and Publishers were trying to build a nice little monopoly for themselves. Which would lock out any other companies interested in ebooks and would take advantage of authors. Unfortunately, for them, Authors and Rival companies didn’t fall for the ‘Saving Penguins’ nonsense and objected and opted out and destroyed any chance of Publishers+Google getting away with this monopoly creating Agreement.

Judge Chin made an amazing decision. Notice his recommendation – Change it to an ‘opt-in’ instead of an ‘opt-out’. That’s brilliant. That ensures that only authors who actually know what the settlement is, and agree voluntarily to participate, are included.

The Huge Ramifications of the Book Settlement Rejection

Judge Chin’s rejection of the Settlement deals a heavy blow to Publishers and Google -

1. It kills Publishers hopes of a Divide and Conquer strategy. Without something like exclusive rights to all orphan works they have no way to slow down Amazon and B&N.
2. It significantly weakens Google’s dual hopes of a subscription based approach and of books supported by advertising. Both approaches depend heavily on having access to books other companies don’t have access to. They also depend heavily on offering orphan works as cheap throw-ins. No one ever considered the possibility that Google might just throw in these for free or very cheap to gain an advantage – that Google might have no interest at all in making rights holders any money.
3. It means that Amazon and Apple and B&N are safe. Publishers & Google do not get a permanent monopoly on orphan works – an advantage which no other company would ever be able to match.

Publishers intended to use the Settlement as a way to empower Google and turn the eBook Wars into a three-way tussle between Amazon and Apple and Google.

Google intended to use the Settlement as a way to introduce the virus of advertising-supported Free into the world of books. Note that 96% of Google’s revenue is advertising - it’s naive to assume that Google intended to focus on generating viable revenue for authors. It just wanted YouTube Part 2.

Google was extremely interested in giving away books and orphan works for free and very cheap (as part of subscriptions). It had little interest in maintaining the value of books. Why? Because enough pennies and they add up to something that even Google finds sizeable. Of course, authors would have their work devalued – But Google doesn’t care because pennies added up across all authors’ books leads to a lot. Who cares if authors starve?

A Win for Readers and Authors

Middle-men always have big promises – we are preserving books for future generations, we are letting authors make money from books that are out of print.

The truth is that middle-men are always leeches and parasites trying to take advantage of naive readers and gullible authors. Why try for an ‘opt-out’ agreement? Why try to make money from orphan works when the rights holders can’t be found? Shouldn’t those works be given away free?

Publishers and Google were creating a huge monopoly for themselves. Judge Chin saw through all the lies and hypocrisy and suggested exactly what the Settlement should have been – Valid only for authors who agree to participate.

All the layers between Authors and Readers are being stripped away. Platforms are useful and Apple and Amazon are earning their 30% cut. However, leeches that try to forcibly take the works of others and sell them for profit have no place in the New Publishing World.

Filed under: books | Tagged: future of books | 5 Comments »