Despite a protracted battle and lengthy negotiations with authors’ groups , Google’s plan to scan and sell millions of out-of-print and difficult-to-find books still faces significant government scrutiny and potential roadblocks. In the related but more competitive e-book sector, however, authors’ and publishers’ increased bargaining power may lead to a less contentious agreement in that arena.
Google has been mulling its own offering in the burgeoning e-book reader market for more than a year now, and new players in this field may spur the company to action. Despite its plans, however, Google is facing some pushback from authors and publishers over how revenues from the company’s forthcoming e-book service will be shared.
It appears as if the newfound bargaining power may have come from similar negotiations with Apple over the recently released iPad and with Amazon. While Google had proposed giving publishers 63 percent of the price of a digital book, Apple agreed to give publishers 70 percent.
Among a slew of potential benefits, increased competition in markets allows more efficient transactions between two parties, thus helping to maximize total welfare. In this case, more intense competition in this growing realm appears to have given publishers and authors more bargaining power and potentially prevented Google from extracting more from the deal than they would have been able to in an efficient market.
Ultimately, competition will not only drive the prices of all e-book readers down, but also provides more balance between Google’s desire to control more of the book market and publishers’ and authors’ desire to maintain ownership of their work.
While the e-book domain is vastly different than the selling of scanned books online, increased competition in the latter domain may have led to a more favorable agreement that would have served as a limiting factor on Google’s power over out-of-print publications and those whose authors can’t easily be found. As regulators continue to mull the future of Google’s book settlement with authors, they should consider the benefits of a robust and competitive market when it comes to one company’s ability to gain excessive control over a product or service.
While more competition may have prevented Google from trying to take such a dominant position on scanned books, regulators should ensure that the final deal allows for market entry to help provide balance when it comes to future negotiations.
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