The Economics of Book Digitization and the Google Books Litigation

Abstract

This piece explores the digitization and uploading to the Internet of full-text books, book previews in the form of chapters or snippets, and databases that index the contents of book collections. Along the way, it will describe the economics of copyright, the "digital dilemma," and controversies surrounding fair use arguments in the digital environment. It illustrates the deadweight losses from restricting digital libraries, book previews, copyright litigation settlements, and dual-use technologies that enable infringement but also fair use. By taking into account the lack of evidence that some forms of copying inflict serious harm, the emerging law of digitization and search engines for books would return contemporary copyright doctrine to a time when it only prohibited acts more likely to result in economic harm, such as competitive piracy.

Keywords: copyright, fair use, digitization, publishing, books, novels, markets, potential market, infringement, file sharing, peer-to-peer, economics, sampling, databases

JEL Classification: K20, K21, O31, O32