US probes Google’s $125-m agreement on copyright issues

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: Google Inc’s $125 million agreement to settle copyright issues with book publishers is being investigated by US antitrust regulators.

The issues raised by the settlement, which compensates copyright holders and gives Google a share of online book sales and ads, “warrant further inquiry,” US deputy assistant attorney general William Cavanaugh said on Thursday in a letter filed in US District Court in New York. Google said last month that the justice department had requested information about the agreement.

“The US has reviewed public comments expressing concern that aspects of the settlement agreement may violate the Sherman Act,” Cavanaugh said. “At this preliminary stage the US has reached no conclusions as to the merit of those concerns or more broadly what impact this settlement may have on competition.”

Google, operator of the world’s most popular Internet search engine, is also under investigation by antitrust regulators for possible collusion with other technology companies in hiring practices and for sharing two board members with Apple Inc.

“We feel very comfortable that the decisions that we have made, including the ones that have gotten us into hot water, have been pro-consumer,” Eric Schmidt, Google’s chief executive officer, said this week in an interview on CNBC.

The Mountain View, California-based company is creating an online database of books by scanning millions of titles. It reached the agreement with publishers last year to settle a 2005 lawsuit filed by the Authors Guild, Pearson Plc’s Penguin unit and other publishers claiming the digitising process infringed their copyrights.

The deal could make Google the main online source for millions of out-of print books, raising antitrust concerns because it puts the distribution of those books in the hands of one company. Before the settlement, publishers and authors fought the project on the ground it constituted massive copyright infringement.

The agreement won preliminary court approval in November.

Under the settlement, authors and publishers will have the final say on whether their copyrighted works may be included in the project. Google and the publishers will use $34.5 million of the settlement fund to create a registry program to compensate rights holders, and another $45 million will be used to pay authors whose works have been scanned without their permission, according to court papers.