Nes : Microsoft, Yahoo join in opposing Google books deal

By David Lawsky

SAN FRANCISCO (Reuters) - Microsoft Corp and Yahoo! Inc are joining a group of opponents to a class action settlement that gives Google Inc the right to digitize millions of books, the companies said on Friday.

The companies are becoming part of the Open Book Alliance, made up of nonprofits and libraries that have raised a red flag against Google's plan to digitize books and put them on the Internet.

"Yes, we've agreed to participate in the coalition," a spokesman for Microsoft said. A Yahoo spokeswoman said they had also signed on.

Amazon.com Inc has also reportedly joined, but a spokeswoman said: "We don't comment on rumor or speculation."

Critics say the deal gives Google the unimpeded ability to set prices for libraries, once they scan books and put them on the Internet. If the service becomes a necessity for libraries they would face monopoly pricing, Google's opponents say.

They also say it would also allow Google -- and only Google -- to digitize so-called orphan works, which could pose an antitrust concern.

Orphan works are books or other materials that are still covered by U.S. copyright law, but it is not clear who owns the rights to them.

Google took issue with the criticism. "The agreement is not exclusive. If improved by the court it will expand access to millions of books in the U.S.," said Gabriel Stricker, a spokesman for Google.

"The agreement stands to inject more competition into the digital book space, so it's understandable why our competitors would fight hard to prevent more competition," he said.

New York University law professor James Grimmelmann, who runs thepublicindex.org site, which carries documents on the case, said he is waiting to see the arguments of the Open Books Alliance.

"Google is right that there are access benefits to making books available," said Grimmelmann. "The question of whether this is good or bad for competition is hotly contested. There are clear ways that the settlement could create a concentration of power, especially over orphan books."

The deal is under review or investigation by the U.S. Justice Department, the European Commission and a group of U.S. state attorneys general.

The proposed settlement was reached in October, 2008, to settle a lawsuit filed in 2005 by the Author's Guild, when Google began scanning books.

The Guild and a group of publishers has alleged copyright infringement.

Google has agreed to pay $125 million to create a Book Rights Registry, where authors and publishers can register works and receive compensation from institutional subscriptions or book sales. A hearing on approval of the settlement is set for October 7 in U.S. District Court in New York.

(Reporting by David Lawsky; Editing by Tim Dobbyn)