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Google and Amazon: Making Theft and Price-Fixing the Legal Default

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For the first time in American history, a single corporation is attempting
to gain full ownership of an extraordinary number of books printed during the
last century, effectively controlling their dissemination by default without
the consent of those who still hold valid copyrights. In early September
authors and their representatives ran out of time to invoke ownership of their
own writing and opt out of a legally questionable settlement.  The
settlement, which is pending in federal court, reveals Google Inc.'s
unprecedented attempt to invert the United States copyright structure and
monopolize control of a huge swath of intellectual property. 

The current agreement, reached in 2008 between Google, The Authors Guild of
America, and the Association of American Publishers has touched off the most
vociferous public battle between technology companies since the inception of
the Internet.  At stake is supremacy in the coveted marketplace of content
ownership and book digitization.  The Justice Department filed strong
objections to the settlement last week, registering concerns that Google has
violated anti-trust laws by gaining such broad control without legal
supervision.  Those concerns resulted in a request by all three parties
this week for a postponement of the court’s ruling while they rewrite the
agreement.

Online book retailer Amazon.com, Google’s non-profit rival The Internet
Archive, Yahoo, Microsoft, and other media companies have joined an umbrella
organization called The Open Book Alliance to combat Google’s advance.  In
recent weeks they have filed a barrage of complaints to the court and
Congress.  Their appeals and public statements have exposed for the first
time large areas of legal uncertainty in an industry known for widespread avoidance
of public legal battles and legislative interference.

In their legal assault, Amazon appears to have suggested its own involvement
in business practices that have widely been considered unethical and
potentially illegal.  An Amazon spokesperson told the Associated Press
last month that if Google were to gain control of the marketplace his company
would no longer be able to obtain low prices for customers by, “playing one
publisher off against another." Their statement implies the use of
manipulative negotiating practices to receive books at lower wholesale prices
than competitors despite the existence of legal precedents that restrict large
companies from receiving disproportionately favorable discounts.

The Author’s Guild has also come under fire, with critics questioning the
right of an advocacy group to negotiate on behalf of authors who did not seek
their support.  If upheld, such a broad invocation of representative power
by a guild would be unprecedented in American history.

Compounding the problem is the prevalence of conflicts of interest among
board members of nearly every party involved in the litigation.  One
particularly disconcerting example involves the venture capital firm Kleiner,
Perkins, Caufield, & Byers which currently has three partners serving as
board members or advisers to Google or Amazon, including John Doerr who is a
board member at all three companies. 

The triumvirate of Kleiner board members also includes former Vice-President
Al Gore who is a senior advisor to Google.  Gore’s presence is a reminder
of the close proximity between the political establishment that first gave rise
to broad Internet use and the now-powerful companies that benefited from
government encouraged non-regulation throughout the 1990’s and into this
decade.

The rise of these companies has created an institutionalized imbalance
predicated on the absence of basic legal strictures in the technology
sector.  Without regulation tech companies have fed a decade-long
ascendancy on a margin of profit derived from their near universal exemption
from state tax laws.  Their rise has been accompanied by a consolidation
of power among former politicians and wealthy individuals with evident
connections to each other and each others’ companies.  Their ties have made
it impossible for them to act as impartial advocates for the companies they
represent. 

Google has made boldest move thus far in an industry that is reaping large
financial rewards at the expense of American taxpayers. As tech skirmishes
become more public, the legal and legislative branches of American government
will be forced to address issues that have been willfully ignored for a
generation.  The implications of delayed intervention are
potentially devastating for the interaction
of states, the rights of citizens, and the role of governance in business.  Non-regulation now directly endangers the words
and creations of our artists in ways that were previously inconceivable. A
failure to act comprehensively will only result in the continued exploitation
of a growing class of impoverished taxpaying citizens who have already borne
the largest burden for the least reward from one of the greatest advances in
human history.