As Google evolved from being an endearing start-up company to an Internet empire, the company has become used to critics depicting it as a copyright scofflaw and pushy monopolist. It's different when the unflattering portrait is being drawn by a federal judge.
Tuesday's ruling by U.S. Circuit Court Judge Denny Chin did more than complicate Google's efforts to make digital copies of the world's 130 million books and possibly sell them through an online bookstore that it opened last year. It also touched upon antitrust, copyright and privacy issues that are threatening to handcuff Google as it tries to build upon its dominance in Internet search to muscle into new markets.
"This opinion reads like a microcosm of all the big problems facing Google," said Gary Reback, a Silicon Valley lawyer who represented a group led by Google rivals Microsoft Corp. and Amazon.com to oppose the digital book settlement.
Google can only hope that some of the points that Chin raised don't become recurring themes as the company navigates legal hurdles in the months ahead.
The company is still trying to persuade the U.S. Justice Department to approve a $700 million purchase of airline fare tracker ITA Software nearly nine months after it was announced. Regulators are focusing its inquiry into whether ITA would give Google the technological leverage to create an unfair advantage over other online travel services. Google argues that it will be able to provide more bargains and convenience for travelers if it's cleared to own ITA's technology.
In Europe and Texas, antitrust regulators are looking into complaints about Google abusing its dominance of Internet search to unfairly promote its own services and drive up its advertising rates.
And Google is still trying to fend off an appeal in another high-profile copyright case, one stemming from its 2006 acquisition of YouTube, the Internet's leading video site. Viacom is seeking more than $1 billion in damages after alleging that YouTube misused clips from Comedy Central, MTV and other Viacom channels. A federal judge sided with Google, saying YouTube had done enough to comply with digital copyright laws in its early days.
Viacom is trying to reverse that decision in the 2nd U.S. Circuit Court of Appeals in New York, where Chin now works after being promoted from U.S. District Court last year.
"Google has built a monopoly in search, and having a monopoly isn't necessarily illegal," said John Simpson, a frequent Google critic who has been following the company's business practices for the advocacy group Consumer Watchdog. "The question is: Once you are in a monopoly position, how do you use it? I think Google has repeatedly abused it, and that come out in this decision."
Tuesday's setback comes less than two weeks before Google co-founder Larry Page takes the reins as the company's CEO from Chairman Eric Schmidt.
Building a digital version of ancient Egypt's fabled Library of Alexandria has long been one of Page's pet projects. He and his partner, Google co-founder Sergey Brin, say they want to provide access to all the knowledge in the world's books to anyone with an Internet connection, an ambition that make an appeal or an attempt at a revised settlement more likely.
Although he applauded the digital book concept, Chin concluded that Google has been approaching it the wrong way.
The judge chastised Google for "engaging in wholesale, blatant copying without first obtaining copyright permissions." The company instead negotiated with libraries to make electronic copies of the printed books on their shelves. The strategy has enabled Google to scan more than 15 million books since 2004, even as authors and publishers who thought their copyrights were violated protested in court.
Chin's opinion about Google's disregard for copyrights echoes complaints that have long been made by some publishers, broadcasters and movie studios.