US judge rejects Google's deal with publishers, authors

Google's ambitious plans to create the world's largest digital library suffered a setback after a US judge rejected a $125-million settlement between the internet giant and publishers and authors, but suggested modifications to the deal.

Denny Chin, a circuit court judge in Manhattan said the amended settlement agreement gave Google ''a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission.''

Google signed the deal with the Authors Guild and Association of American Publishers – which had sued the company about five years ago – agreeing to pay $125 million to publishers and authors whose books were scanned by it. It also promised to trace authors and compensate them.

Opponents of the deal included Amazon.com Inc, Microsoft Corp, Yahoo! Inc and the German and French governments. But last year, the French government reached an agreement with Google to allow the scanning of French work, without surrendering their copyright.

Google's opponents including Amazon (which sells the Kindle digital reader), Microsoft and Yahoo! fear that Google would gain unfair control over digitalised works, while many author groups opposed the deal as they would lose control of their copyrights. Sony Corp, which sells an e-reader that is compatible with Google's software, backs the deal.

The internet major has scanned nearly 12 million books from leading libraries in the US. The deal with publishers and authors covers out-of-print works that are protected by US copyright laws. Among those who signed the deal with Google were the Author's Guild, Pearson Plc, McGraw-Hill, John Wiley & Sons Inc. and Simon & Schuster.