Google Books' Latest Foe: The Justice Dept.

(page 2 of 2)

Is Google the new Microsoft?

Having compiled evidence that helped Justice and 20 state attorneys general pursue their landmark antitrust case against Microsoft, Reback has sniffed out what he thinks may be the next big threat to high-tech competition. "I didn't do all that work to have some other company do the same thing the last company did," Reback says.

The attorney took up his latest cause early this year after the publisher of his latest book, Free the Market! Why Only Government Can Keep the Marketplace Competitive, suggested he write an op-ed about the Google book controversy. "The more I looked at it, the more I shook my head in wonderment," Reback says. "Since the breakup of AT&T (T), there's never been a proposal with such broad-ranging economic and social effects."

Reback argues that Google's settlement would grant it and a handful of publishers control over pricing and distribution in the electronic book market for the foreseeable future. The proposed registry would charge around $5.99 for online access to the full text of out-of-print books as well as in-print titles that publishers choose to put on the site. Amazon sells books for the Kindle at $9.99. "If the settlement goes through as Google and the plaintiffs envision, there will be a single source for digital books," Reback says. "And digital books are the only part of the publishing industry that's growing significantly."

Reback also argues that Google intends to use its dominant position in search to get the upper hand in books"a tactic he believes Microsoft tried to use in the previous decade by bundling its Internet Explorer browser with Windows. "If book search is merged into Google.com, how is that different from Microsoft bundling the browser into the operating system?" he asks.

google may be willing make concessions

Book publishers who initially railed against Google's digital book efforts have made peace with the Web company. The Association of American Publishers, which includes Simon & Schuster, Random House, and BusinessWeek.com parent The McGraw-Hill Companies (MHP), supports the settlement in hopes that Google's project will increase online access to books and allow publishers to receive compensation for works that may otherwise collect dust.

Google says the digital-book efforts are just part of its larger stated mission to organize the world's information. "Often when people have a question, they turn to Google to answer it, and we want to make it easier for our users to find the answer to their question from the source, no matter what format it's contained in," says Google spokeswoman Jennie Johnson. "If the settlement is approved by the court, we can help our users by showing them the book that has the answer."

Still, Google may be willing to make some concessions. According to a Sept. 16 Bloomberg report, Google and a group of authors and publishers are in talks with the Justice Dept. to modify some terms of the settlement, though no details have been disclosed. The company would not comment on the matter.

While Reback's old foe Microsoft has bolstered his cause, the latest helping hand has come from an old friend in Washington: Christine Varney, the Justice Dept.'s top antitrust enforcer, worked with Reback during the 1990s when she helped Web browser Netscape Communications make its case against Microsoft. While her agency's recent filing has no binding authority over the decision of Judge Chin, Reback says "it will be very influential."

Douglas MacMillan is a staff writer for BusinessWeek in New York.

Business Exchange

Track and share business topics across the Web.