Federal officials think Google's revised book-scanning settlement still gives the company too much power.

Federal officials think Google's revised book-scanning settlement still gives the company too much power.

The U.S. Justice Department still thinks a proposal to give Google the digital rights to millions of hard-to-find books threatens to stifle competition and undermine copyright laws, despite revisions aimed at easing those concerns.

The opinion filed Feb. 4 in New York federal court is a significant setback in Google’s effort to win approval of a 15-month-old legal settlement that would put the internet search leader in charge of a vast electronic library and store.

A diverse mix of Google rivals, consumer watchdogs, academic experts, literary agents, state governments, and even foreign governments already have urged U.S. District Judge Denny Chin to reject the agreement.

The Justice Department’s perspective presumably will carry more weight with Chin, given its position as the chief U.S. law-enforcement agency.

In its 26-page brief, the Justice Department praised the revised settlement for making “substantial progress” since it objected to the original agreement in September.

But the government advised Chin that the agreement still oversteps the legal boundaries of a class-action settlement, describing the proposal as “a bridge too far.” The Justice Department also raised concerns that Google’s partnership with the participating U.S. publishers could turn into a literary cartel that would wield too much power over book prices.

“The United States believes that the court lacks authority to approve” the settlement in its current form, the government’s lawyers wrote.

The filing also asserted that the modified agreement doesn’t adequately protect the copyrights and financial interests of “orphan works”—out-of-print books whose writers’ whereabouts are unknown.

Despite its misgivings, the Justice Department urged the parties to take another stab at making changes that would eliminate its legal concerns.
The department provided a list of recommendations on how to achieve that.

In a statement, Google spokesman Gabriel Stricker gave no indication whether the company and other settling parties are willing to amend the agreement again.

“The Department of Justice’s filing recognizes the progress made with the revised settlement, and it once again reinforces the value the agreement can provide in unlocking access to millions of books in the U.S.,” Stricker said.

Chin has scheduled a Feb. 18 hearing to consider approving the class-action settlement.

Consumer Watchdog, one of the groups fighting the settlement, applauded the Justice Department for taking a stand against a deal “that unfairly benefits the narrow agenda of one company.”