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Elhauge on the Antitrust Issues in the Google Books Settlement

By Lawrence Solum

Einer Elhauge (Harvard University - Harvard Law School) has posted Framing the Antitrust Issues in the Google Books Settlement (GCP: The Antitrust Chronicle October, No. 2009) on SSRN. Here is the abstract:

Proper analysis of the Google books settlement requires framing the issues correctly in two important respects. First, it requires understanding that sound antitrust analysis turns on likely effects on consumer welfare, not on debatable spins of arid formalisms. Second, it requires measuring those effects compared to the but-for baseline of what the world would look like but for the settlement.

Given the proper framing, the right question to ask is: Does settlement lower consumer welfare from what it would be without a settlement? It is not an antitrust violation to enter into an agreement that benefits consumer welfare on the theory that another agreement could have benefited consumer welfare even more. Otherwise every joint venture could be stricken on the grounds that it would benefit consumer welfare even more if the joint venture offered its product for free.

So the right question to ask about the Google books settlement is not whether one could imagine some alternative settlement that might benefit consumers and the public interest even more than the actual settlement. Rather, the right question is whether the settlement leaves consumers and the public interest worse off than they would be in the but-for world without the settlement, and there is simply no reason to think it does.

Full post as published by Legal Theory Blog on February 12, 2010 (boomark / email).