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A Rule of Reason Approach to the Antitrust Issues of the Google Book Search Settlement

Kelvin H. Kwok, DePaul Business & Commercial Law Journal, Vol. 10, No. 1, p. 401, 2011

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This paper examines, from an antitrust perspective, the recent controversy of the Google Book Search (GBS) settlement in its broader context of copyright collective administration. It argues that courts should view competitive concerns of the settlement pertaining to exclusivity and pricing as ancillary restraints to an overall procompetitive copyright collective, and hence courts should analyze the settlement using the rule of reason instead of condemning it as per se illegal under antitrust law. In particular, I will examine closely the following five issues: (1) How does the GBS settlement relate to ASCAP/BMI blanket licensing in the music performance context and copyright collective arrangements in general? (2) Why should courts apply the rule of reason (as opposed to a per-se illegal rule) to analyze anticompetitive features of the GBS settlement and other copyright collectives? (3) What is the proper antitrust baseline against which a rule-of-reason analysis is conducted? More precisely, should an antitrust court ask whether a collective scheme is overall efficiency-enhancing or should look it for a “less restrictive alternative” which is equally capable of achieving procompetitive goals, albeit in a less anticompetitive manner? (4) How should a court identify and weigh anticompetitive justifications and procompetitive objectives of an ancillary restraint? How can a “reverse” rule of reason be adopted to help courts and parties to identify efficiency modifications to an existing collective arrangement? (5) What would be the result if the rule-of-reason analysis is applied in the specific context of the GBS settlement in evaluating the competitive effects of allegedly anticompetitive restraints and proposed modifications?

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