The Perfect is the Enemy of the Good: The Antitrust Objections to the Google Books Settlement
46 Pages Posted: 22 Oct 2011 Last revised: 27 Nov 2012
Date Written: October 20, 2011
The Google Books settlement recently rejected by a district court has been criticized as anticompetitive. Critics argued, and the court agreed, that approval would give Google a “de facto monopoly over unclaimed works” and “arguably give Google control over the [online] search market.” I disagree with these assessments. Though the settlement would indeed give Google de facto exclusivity over “orphan” or “unclaimed” works, it seems implausible that a small subset of out-of-print books with the least commercial value can be so unique and valuable that having exclusivity would give someone market power in an antitrust sense. But even if it does, there must be anticompetitive effects and there are few, if any, such effects. While exclusivity may not be ideal, the settlement would revitalize millions of out-of-print books, a feat that would be impossible without the settlement, and there is no less restrictive alternative. As for the argument that exclusivity over unclaimed books would further Google’s dominance in online search, there are some basic problems with this dubious, though ambitious, claim that will be addressed.
The settlement, not only enhances welfare from a microeconomic perspective, but also promises important social benefits, including equal access to books to all.
The settlement is not perfect but antitrust law does not require perfection. I will discuss why a few “perfect” alternatives preferred by objectors to the settlement are not necessarily more welfare enhancing. Even if they were, there is little to be gained and much to lose by rejecting the good for the conjectural perfect. I conclude with a suggested solution.
Keywords: Google, Books, Google Books, Google Books Settlement, Amended Settlement Agreement, Digital Books, Copyright, Monopoly, Monopolization, Unclaimed Books, Orphan Books, Out-of-Copyright, Out-of-Print, Entry Barriers, Internet, Antitrust
JEL Classification: K21, L12, L40, L41, L42, L49
Suggested Citation: Suggested Citation