The Google Library Project (Google Books) was launched in 2004. Google scans, converts and stores millions of books thanks to agreements with public libraries: New York Public Library, Harvard, Stanford, and Michigan University libraries in the USA, the Bodleian at Oxford University in the UK, and the Bibliothèque municipale of Lyon, France. By early 2011, Google had proceeded to digitize 15 million books, making text-mining possible on a massive scale (ParisTech Review 2011).

The business model consists of free access, advertising, indirect revenues due to an increase in traffic, exploitation of personal data and a broadening of Google’s panel of services.

A series of law cases

During the autumn of 2005, a group of authors and publishers filed a class action against Google, alleging copyright violation.Footnote 1 Google argued that scans of copyrighted works were based on fair use (or use that does not require authorization by the copyright holder). In 2008, after lengthy negotiations, the parties agreed on a settlement. Google would continue to make books in the public domain available for users to read, download and print, free of charge. For works under copyright protection, Google would pay $45 M to compensate rights holders for works it had already scanned. The user would see bibliographic information and a few text “snippets” around the search term, unless the publisher had given Google permission to display more. Google offered a possibility of opting out: if rights holders did not want Google to sell or include their books, they just had to say so. This clause results in a transaction cost argument (Gordon 1982): clearing rights to sell digital copies of out-of-print books, one by one, would be prohibitively expensive.

Google could also commercialize copies of the books to individual consumers, license access to a database of millions of out-of-print books, and display ads next to book contents. Google would pay 63 % of the proceeds to a Book Rights Registry, which would be charged with locating rights holders and paying them for Google’s use of their books (Hanratty 2005).

But the settlement was rejected in 2011, considered “not fair, not adequate and not reasonable.” Nevertheless, in November 2013, Judge Denny Chin dismissed the Authors Guild’s lawsuit against Google, considering Google’s action fair.

The case for fair use

As Klein et al. (2002) demonstrate, the main determinant of fair use is whether the use adversely affects the present or future economic value of the copyrighted work. Fair use is an attempt to balance the tension in the purpose and the effects of copyright law (Benhamou and Farchy 2014): creative working requires creators to profit from their work and, reciprocally, advances in science and knowledge demand broad public access to prior works.

In order to appreciate the value effect of Google Books and to decide whether the use qualified as fair, the Judge launched four non-exclusive tests: purpose and character, nature of the copyrighted works, amount and substantiality of portion used and effect of use upon potential market or value. He concluded that nonfictional books are entitled to less protection against a fair use claim than fictional works. Taking into account that about 93 % of the books in Google Books are nonfiction, the question of protection is not crucial. Moreover, Google limits the amount of text it displays in response to a search and does not engage in the direct commercialization of copyrighted works. Even when scans are available, they are not a substitute for books: users do not get access to the whole text free of charge.

The judge insisted on the social benefits of Google Books which allow poorly resourced research libraries to preserve their collections while increasing the efficiency of discovery by providing a new and efficient way for readers and researchers to find books. “Google Books permits humanities scholars to analyze massive amounts of data—a literary record created by a collection of tens of millions of books.”Footnote 2

Last but not least, Google Books enhances the sale of books to the benefit of copyright holders by helping them to preserve books and offer them new life. This last point reflects the argument stressed by Anderson (2006) in favor of Amazon.

This decision raises deep implications as it leaves the field wide open with regard to the concept of fair use (Samuelson 2010). Taking into account the tension stressed above concerning the purpose and implementation of copyright law, it allocates more importance to dissemination than to protection: Google is supposed to increase search efficiency, to expand access to books for all citizens, including minorities, and to increase knowledge access for institutions, whatever their resource level.

A source of expansion for Google

How can we interpret Google’s strategy? By making text-mining possible and more efficient on a large scale, the number of visitors and the competitive quality of the search engine is improved. Therefore, advertising may be more expensive, even if it is not directly linked to Google Books.

In the same movement, by fighting against a monopoly (property rights), the Judge’s decision creates another monopoly (Google over a corpus of millions of out-of-print books), at a risk: Google can decide to price reading, and prices of scanned books may rise over time. Moreover, prices may become out of reach for many institutions of education (Darnton 2010).

Finally, while Google Books is presented as a non-profit initiative, it contributes to the economic power of Google and questions the capacity of publishers and retailers to implement a complementary strategy for eBooks.