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http://ssrn.com/abstract=1462282
 
 

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Google and the Proper Antitrust Scrutiny of Orphan Books


Jerry A. Hausman


Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

J. Gregory Sidak


Criterion Economics, L.L.C.

August 1, 2009

Journal of Competition Law & Economics, Vol. 5, No. 3, pp. 411-438, 2009

Abstract:     
We examine the consumer-welfare implications of Google’s project to scan a large proportion of the world’s books into digital form and to make these works accessible to consumers through Google Book Search (GBS). In response to a class action alleging copyright infringement, Google has agreed to a settlement with the plaintiffs, which include the Authors Guild and the Association of American Publishers. A federal district court must approve the settlement for it to take effect. Various individuals and organizations have advocated modification or rejection of the settlement, based in part on concerns regarding Google’s claimed ability to exercise market power. The Antitrust Division has confirmed that it is investigating the settlement. We address concerns of Professor Randal Picker and others, especially concerns over the increased access to 'orphan books,' which are books that retain their copyright but for which the copyright holders are unknown or cannot be found. The increased accessibility of orphan books under GBS involves the creation of a new product, which entails large gains in consumer welfare. We consider it unlikely that Google could exercise market power over orphan books. We consider it remote that the static efficiency losses claimed by critics of the settlement could outweigh the consumer welfare gains from the creation of a valuable new service for expanding access to orphan books. We therefore conclude that neither antitrust intervention nor price regulation of access to orphan books under GBS would be justified on economic grounds.

Number of Pages in PDF File: 28

JEL Classification: K20, K21, L40, L41, L50, O34

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Date posted: August 26, 2009 ; Last revised: October 27, 2012

Suggested Citation

Hausman, Jerry A. and Sidak, J. Gregory, Google and the Proper Antitrust Scrutiny of Orphan Books (August 1, 2009). Journal of Competition Law & Economics, Vol. 5, No. 3, pp. 411-438, 2009. Available at SSRN: http://ssrn.com/abstract=1462282

Contact Information

Jerry A. Hausman
Massachusetts Institute of Technology (MIT) - Department of Economics ( email )
50 Memorial Drive
Room E52-271a
Cambridge, MA 02142
United States
617-253-3644 (Phone)
617-253-1330 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
J. Gregory Sidak (Contact Author)
Criterion Economics, L.L.C. ( email )
1717 K Street, N.W.
Washington, DC 20006
United States
(202) 518-5121 (Phone)
HOME PAGE: http://www.criterioneconomics.com
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