At the Public Knowledge blog, Jef Pearlman noted what I consider to be one of the most critical and important aspects of the Google Book Search settlement: it creates a tremendous barrier to entry for other actors who wish to provide services based on the large number of works that are potentially in-copyright, out-of-print.  Jef observes (emphasis added):

... [T]his settlement only applies to Google. Even in the ideal case where the BRR [Books Rights Registry] offers similar rights to non-Google organizations on nondiscriminatory terms -- a situation which I sincerely hope will come to pass -- the BRR can only offer third parties licenses for those authors in the registry. It is only the opt-out nature of a class action law suit that allows the AAP and Authors Guild to license the rights of millions of rights holders who are not actively involved in the case and often don’t even know they have rights to defend. Short of getting sued and settling (in a non-collusive fashion), no one else can pull this off. And since the case didn’t go to judgment, anyone else who wants to make fair use of these works will face uncertain legal ground and the possibility of a massive copyright suit. (As a side note, this means that Google’s license and the BRR’s collection on behalf of missing authors isn’t really a private sector solution, as it would have been completely impossible without the court’s assistance.)

If the Southern District of New York U.S. District Court certifies the publisher and author classes and endorses the proposed settlement without significant modification, it arguably assists the creation of a monopoly in the market for access to an immense body of literature.  The costs of entry for other participants would be prohibitively high.  Any other entrant would either have to bargain with every individual prospective rights holder to receive the same benefit that Google obtains through its presumptive settlement -- clearly not a realistic option -- or it would have to risk significant litigation in order to achieve its own class action settlement.  When a firm seeking to create a competitive market has to bet on the receptiveness of conflicting parties to judicial rulings at the risk of significant, perhaps mortal, financial exposure, there is an unacceptable barrier to entry.  

As I wrote in "Searching for Flamenco" in February 2008:

If there is a settlement, the overriding loss is the enervation of potential competition. For we would have a settlement, almost certainly based on a collective ... judgment that would need be granted by the court, as opposed to a potentially replicable set of proposals with individual publishers. It would be a special and unique arrangement that benefits Google by not only eliminating significant potential and unknown liability, but also permits them remuneration on the access against books provided by private and public libraries for Google's scanning.  It also privileges publishers, as noted over a year ago by Larry Lessig, in Jeffrey Toobin's New Yorker article, Google's Moon Shot: "The publishers will get more than the law entitles them to, because Google needs to get this case behind it.  And the settlement will create a huge barrier for any new entrants in this field."

In a generic sense, whatever marketplace good derives from the concept of "competition" -- the compulsion to produce new features, to race into underserved markets wielding the lethal sword of innovation -- will be sorely diminished. In a settlement, only Google amongst all market actors would compile a significant portion of the public domain, combined with the out-of-print, as well as in-print, texts. The benefits of such a significantly concentrated ownership position multiply with the accumulation of content, generating uniquely enhanced advertising revenue.

The consequential costs of monopoly are very rarely dissolved by an absence of market impact; the effect of raising the barrier to entry into this immense digital corpus of literature falls well beyond the value of the literature itself.  Instead, it resides primarily from the intelligence Google can mine from within the corpus, appliquéd with the digital footprints left by individuals and organizations that browse the data, and who in many cases have purchased access to it.  Google obtains a modest and steady income from individual and institutional access, but that income is of relatively small merit to them.  For rightsholders, publishers and authors see the settlement as opening the door to a new path of product distribution, but they are missing a far larger, and far more important, value that they will never be able to touch.

For Google, that value is derived not from the commerce of books, but from mining this vast collection of information, unearthing its store of recorded knowledge and mapping its unseen conceptual relationships, and then integrating that knowledge across a wide range of information- based products, ultimately supporting advertising revenue.  That revenue would be effectively forever prohibited to other parties by the approval of this agreement.   From a commercial perspective, these data are unique, held only in Google's armory.

When the Department of Justice (DoJ) started to raise questions in the Fall of 2008 on the impact of an advertising business deal between Google and Yahoo, Google decided to walk away from the negotiations.  As David Drummond, Google's chief counsel stated:

...[A]fter four months of review, including discussions of various possible changes to the agreement, it's clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn't have been in the long-term interests of Google or our users, so we have decided to end the agreement.

The DoJ noted in its November 5 bulletin:

The Department’s investigation revealed that Internet search advertising and Internet search syndication are each relevant antitrust markets and that Google is by far the largest provider of such services, with shares of more than 70 percent in both markets.

The blog AllThingsD observed in its own commentary, the DoJ is thereby advising that search advertising and search syndication are markets that bear monitoring:

Internet search advertising and Internet search syndication are "relevant antitrust markets." In other words, they’re natural monopoly businesses.

In the light of these discussions about Google's impact on advertising and search, would it not then be worthwhile to consider the deleterious impact of endorsing a class action settlement that fosters increasing aggregation of persistent influence over markets that the DoJ has put a watch on?