Politics and Law

Perhaps the next time Brad Smith heads to Brussels, it will be for a vacation.

After years of wrangling with Microsoft, the European Commission announced an accord with the software giant Wednesday on several fronts that seems poised to put an end to its antitrust concerns with Redmond.

Brad Smith

(Credit: Microsoft)

In the wake of the announcement, I spoke to Smith, Microsoft's general counsel, about the decision, what it means for the future of Windows, and whether the company sees its spot on the antitrust hot seat now being taken up by other companies, including Google.

Here's an edited transcript of our conversation:

Q: Is this really it as far as Europe is concerned?
Smith: This is definitely a major milestone for Microsoft. Today's announcement reflects a broad set of agreements that really address a wide array of issues. At the same time, we obviously need to keep our eye on the ball. Antitrust issues will continue to be important for us, just as they are going to continue to be important for a number of other leaders in our industry. We're going to have to do an excellent job implementing these agreement. We are going to have to do an excellent job addressing any new issues that arise in the future. Having said all that, I also think it is fair to say, as Commissioner [Neelie] Kroes did when she spoke in Brussels, this does represent the closing of one chapter and gives us the opportunity to open a new chapter. We're definitely enthused about that opportunity and we're committed to ensuring the next chapter is a positive and constructive one.

One of the things that Steve Ballmer talks a lot about in terms of antitrust issues is getting legal clarity on what one can and can't do. Do you feel like you now have that understanding with the EU?
Smith: I think this gives us a great deal more clarity. I think it gives the industry as a whole more clarity. It's perhaps most helpful in the area of interoperability because it really implements a new framework. It applies to a broad array of Microsoft products--Windows, Windows Server, Exchange, SharePoint--and for all of these products it has certain principles that we have to adhere to. It addresses the way we implement file formats.

At the same time, no advance on any single day can ever answer all questions for all companies for all time.

Essentially the EU has said through its very objections that you can't put a media player in Windows and you can't put a browser in Windows. What do you feel Microsoft can include in future versions?
Smith: There are two things to think about. First is what gets included in Windows, and second, what's the right way to address something that is included.

Our basic approach is to include in Windows, software that has APIs (application programming interfaces) that will be beneficial for other applications to call on and use. The browser is definitely an example of that. It's quite probably even more important in that role today than it was, say, when the browser issues first arose in the 1990s. The media player plays a similar role in terms of some broad APIs that are used by a wide variety of other applications.

There are other things that we have put in Windows in the past that don't necessarily involve the same role. A good example of that is Windows Live Messenger. We had Windows Messenger in Windows XP. It's not in Windows Vista or Windows 7 We're trying to make thoughtful decisions about what is included.

Then the second question that arises is how do things get included. How do we document APIs that our browser is using so that other browsers can use them as well? That's part of the U.S. consent decree.

How do we ensure that [computer makers] have flexibility to offer competing choices? How do we ensure that consumers are aware of competing choices and can use them if they wish. That latter part is an area where different governments have chosen different approaches at different times. The U.S. Department of Justice chose one approach in its consent decree. The Korean Fair Trade Commission chose a second approach. The European Commission in the media player case in 2004 chose a third approach. Today's announcement on the browser reflects the European Commission choosing a fourth approach.

Some people have the opinion that as a result of these different antitrust issues, Microsoft really finds itself with one hand tied behind its back as it competes in the battles of today. Do you believe Microsoft in the current antitrust environment competes on an even footing with some of the other Internet giants?
Smith: I do believe it is very important for all technology leaders in our industry to follow the same laws and obey the same rules. The rules don't necessarily apply in the same way when a company has a small market share as it does when a company has a large market share. But there are a number of companies that have large market shares for very important products. We've taken a number of steps to get into line with new legal rules in this field. The law has evolved and we've needed to evolve to address these new obligations.

We do believe our competitors need to play by the same rules. They've often been at the forefront of asking regulators to evolve the law in new directions. Now that the regulators have done so, we believe they need to pay attention as well.

Do you anticipate a period of time over the next few years where Microsoft is more likely to be the subject of antitrust inquiries or the company on the other side of the table for a change?
Smith: I think that we have addressed a very wide array of issues. Perhaps, in part because we were the first company to have to go through these inquiries, at least since the dawn of the PC era. We've probably had to go farther and sooner than other companies have had to do. We're now in an era where a different company seems to be in the headlines for competition law issues, if not every day, at least every month.

I think that what we are going to see in the next decade is this field of law being applied to a wide number of technology leaders that have high market share. We're going to see that, not only in Washington and Brussels, but we're likely to see that in more countries around the world simply because the global economy has evolved.

Have you expressed concerns specifically to Europe or Washington, D.C., about some of Google's behaviors?
Smith: We were very transparent last year when Google entered into its agreement with Yahoo. We felt that that was an illegal agreement that Google had entered into for the sole purpose of preventing Microsoft from becoming a more successful competitor, together with Yahoo, in the search space.

It was only when the Department of Justice informed the parties that it was on the verge of filing suit that Google decided to drop that agreement. We have not been shy about raising concerns when we have them.

It was only a couple hours after you guys settled with Brussels that we heard from D.C. with regards to Intel. When you initially heard that the FTC was filing suit against Intel, did you have feelings of empathy toward what their lawyers are going through, or what were your initial reactions?
Smith: I obviously know from a lot of firsthand experience the challenges that arise when a company needs to address these kinds of issues. Our road was a long one and it had its share of difficult moments. Antitrust issues are never easy for company to address.

This isn't a case where Microsoft has taken a public stance or even voiced to the regulators a position, is it?
Smith: We have not taken any public or nonpublic positions on the issues.

Are you guys looking to reach an agreement with Plurk? You guys said that you used code you shouldn't have? I'm curious if you are trying to negotiate some sort of settlement with them?
Smith: I wouldn't want to say anything that goes beyond the public statement we put out.

It does seem when I look at any particular issue with regards to the Internet, Microsoft tends to have a much more cautious approach. It seems like it is tough to compete when others are bundling more than you.
Smith: I think our goal is to be thoughtful but also fast-moving. As we look at the Internet today, it is increasingly a regulated space. That wasn't the case a decade ago. I think a thoughtful company needs to really think through how its products and services are going to comply with the regulations that are going to be enforced or likely to be applied in many different countries around the world. At the same time, one cannot let that get in the way of moving forward quickly. I think it's striking that balance that is really quite important. One needs to move fast. One shouldn't move faster than speed of thought and yet one shouldn't be so thoughtful that one simply analyzes problems and fails to solve them.

Do you think Microsoft has erred a little too much on side of caution in recent years?
Smith: I don't know that we've erred too much on the side of caution, but I do think it's extremely important we move quickly. This is a very dynamic space it is certain to remain a very dynamic space. Customers are interested in deploying new products and services, whether it is on the client, on the server, or on the cloud. The real key is to develop the capability to be both thoughtful and fast moving.

Federal prosecutors have charged a prominent hedge-fund manager and five others with securities fraud resulting from insider trading involving some of the tech industry's best-known companies, including Intel, Google, and IBM.

Raj Rajaratnam of Galleon Group was arrested Friday in New York according to various reports and charged with 13 counts of securities fraud and conspiracy following a FBI investigation into Galleon Group's trading patterns. Also charged in the complaint, filed in U.S. District Court for the Southern District of New York, were co-conspirators Rajiv Goel of Intel and Anil Kumar of McKinsey, which provided consulting services to AMD.

A separate complaint charges two employees of New Castle Partners, another hedge fund, with insider trading along with IBM executive Robert Moffat, senior vice president and group executive for IBM's Systems and Technology Group. Danielle Chiesi and Mark Kurland of New Castle Partners allegedly exchanged information with Rajaratnam regarding the negotiation process surrounding AMD's decision to spin off its chip-making arm and receive outside investment, and obtained other insider information for the purpose of trading in Akamai and Sun Microsystems.

Galleon Group told CNBC that it was unaware of the investigation but planned to cooperate with authorities.

An Intel representative confirmed that Goel works in the treasury department of Intel's finance organization, and has been "placed on administrative leave as we look into this matter." Intel said it was never contacted by authorities regarding the investigation.

McKinsey said in a statement that it was "distressed" about Kumar's involvement in the case and was "looking into the matter urgently. AMD said it was looking at the complaints and had no further comment. IBM declined to comment.

A representative for Akamai did not immediately return a call seeking comment.

According to the complaint, Rajaratnam obtained information about strategic investments that Intel and others were about to make in Clearwire from Goel, and details about AMD's proposed fab spinoff from Kumar and Chiesi. Galleon Group and New Castle Partners then allegedly used that information to trade in shares of Clearwire and AMD, resulting in millions of dollars in profits.

Moffat is also said to have provided details about AMD's GlobalFoundries spinoff, which required IBM's approval due to an extensive technology-sharing partnership between the two companies. In addition, Moffat allegedly gave the traders information related to upcoming earnings announcements from IBM and Sun, which IBM was considering acquiring in early 2009.

Rajaratnam also had hired an individual identified in the complaint only as a "confidential witness" who has been cooperating with the FBI since November 2007 after agreeing to plead guilty to securities fraud and conspiracy. The witness had insider contacts at Polycom and a company called Market Street, which helps publicly traded companies--such as Google--prepare earnings reports.

The FBI said Galleon Group was able to learn through its Market Street contacts that Google's second-quarter 2007 earnings results were going to miss analyst expectations, which would usually send the stock down the following day. Before Google's earnings were released, Galleon Group purchased put options and sold Google's stock short in hopes of turning a profit, which, of course, they did, to the tune of $8 million.

Shares of Polycom and Hilton Hotels were also involved in the insider trading, according to the complaint. The FBI said it obtained its information by placing a wiretap on several phones--including Rajaratnam's mobile phone--as well as the participation of confidential witnesses.

Rajaratnam was named to Forbes' 2009 list of the world's billionaires, with an estimated net worth of $1.3 billion. He is a former employee of Needham & Co., an investment bank.

AT&T has taken off the boxing gloves in its fight against the Google Voice service and proposed changes to Net neutrality rules.

In a letter sent to the FCC (PDF) on Wednesday, AT&T went on the attack to portray Google as a powerful company that's trying to fool the FCC into believing that the rules shouldn't apply to it.

In the letter, AT&T is trying to cover all of its bases. This means that, at times, it's hard to follow which arguments it's trying to make--the one about Google Voice or the one about Net neutrality. And it doesn't help that AT&T stoops a little low by referencing a convent of Benedictine nuns in a list of those hurt by having calls to their numbers blocked to and from Google Voice numbers.

Read more of "AT&T to FCC: Close loopholes and write rules that apply to Google, too" on ZDNet's Between the Lines.

Should Google Voice have to follow the same rules as AT&T?

(Credit: Screenshot by Tom Krazit/CNET)

The Federal Communications Commission is looking into how Google Voice treats calls to certain rural areas that landline phone companies are required to connect.

AT&T placed this complaint before the FCC, accusing Google of failing to live up to the Net neutrality rules it has long supported before the U.S. government. On Thursday, several members of Congress implored the FCC to look into the matter, and their concerns have been heard, according to a report from the Associated Press that Google has confirmed.

The dispute is over Google's practice of blocking calls to certain rural phone networks that are allowed to charge a disproportionately high rate for calls connected to those networks. Some rural carriers, in a practice known as traffic pumping about which AT&T has long complained, partner with companies that draw a high volume of network traffic, such as phone sex operators and conference-calling firms, charge a much higher connection rate, then split the revenue with them.

AT&T is required to connect such calls because it is considered a "common carrier" that is required to ensure open access to networks that were created with public money. "By openly flaunting the call-blocking prohibition that applies to its competitors, Google is acting in a manner inconsistent with the spirit, if not the letter, of the FCC's fourth principle contained in its Internet Policy Statement," Robert Quinn, AT&T's senior vice president focusing on federal regulation, said in a statement last month when it filed its original complaint with the FCC.

Google argues that it is not subject to the same laws because it's a software company and because Google Voice doesn't replace phone service; it still requires phone service to work properly. It addressed the inquiry in a blog post Friday.

"AT&T apparently now wants Web applications--from Skype to Google Voice--to be treated the same way as traditional phone services," wrote Richard Whitt, Google's Washington media and telecom counsel. "Their approach is what a former FCC chairman has called "regulatory capitalism," the practice of using regulation to block or slow down innovation. And despite AT&T's lobbying efforts, this issue has nothing to do with network neutrality or rural America. This is about outdated carrier compensation rules that are fundamentally broken and in need of repair by the FCC."

So now it appears that the FCC will attempt to referee the matter. Google's no stranger to federal authorities at the moment, with just about everything it does falling under the watchful eye of an administration that seems determined to examine dominant companies in the tech industry.

Microsoft's top lawyer said that a tentative agreement with Brussels announced earlier Wednesday could potentially allow the software maker to move out of the regulatory crosshairs, perhaps paving the way for regulators to shift their attention elsewhere.

"It's important for us to get closure in Europe on issues that have obviously been controversial for over a decade," General Counsel Brad Smith said in an interview. "Today's decision takes us an important step closer to doing that."

Smith

(Credit: Microsoft)

Microsoft initially took a much different approach to the European Commission's assertion that the inclusion of a browser in Windows violated antitrust law. The company had initially proposed just stripping out the browser from Windows 7 entirely, leaving users the prospect of trying to get a browser on their own. The software maker eventually backed down after indications that that approach was unlikely to fly.

While not final, Microsoft's moves would appear to resolve all of its outstanding regulatory issues with the Commission and were greeted warmly by regulators on Wednesday.

Although most of the early attention focused on the agreement around a browser "ballot screen," Microsoft also announced on Wednesday an agreement around product interoperability. Under that deal, a 10-year commitment by Microsoft, the software maker agrees to publish communication protocols and adopt certain standards as part of Windows, Windows Server, Office and other high market share products. Companies could also purchase for 5,000 euros a warranty that would subject Microsoft to court oversight and monetary penalties if it doesn't live up to its commitments.

Smith said that the approach Microsoft took with regard to interoperability was designed to adopt methods that Nellie Kroes, commissioner for competition, had outlined in a speech last year for how companies with high market share products should behave.

"I actually think this in effect implements the model that the Commission has been advocating," Smith said. Moreover, he said it is a model that other software companies should pay attention to, he said, noting that there are lots of companies that have high market share. He noted that Google has 78 percent of the paid search market and IBM has 100 percent of the mainframe market, while Adobe also has dominant positions in certain areas, such as Photoshop.

"It is important we believe to create a level legal and regulatory playing field," Smith said. "Everyone that has a high market share needs to respect the same set of rules. I think a number of these rules are likely to be applicable to other companies and other products."

Settling now with Brussels also could help Microsoft in its effort to win approval for its search deal with Yahoo, Smith said.

"This certainly isn't going to hurt when it comes to the Yahoo-Microsoft agreement," he said. "It's not necessarily going to make a huge difference. We didn't feel a particular step was needed to help it along."

Microsoft is in the process of trying to ascertain whether the deal needs approval from Brussels or from individual European antitrust authorities. It also needs approval from U.S. regulators, who have asked for more information on the deal.

An adviser to the European Union has sided with Google in the company's battle with Louis Vuitton and others over alleged trademark infringement.

The search giant is fighting a lawsuit in the European courts against several companies that claim Google is infringing on their trademarks by allowing advertisers to buy keywords that match those trademarks.

Led by LVMH's Louis Vuitton, the companies are upset that makers of imitation items can buy those keywords through Google's AdWords, allowing their products to pop up in searches alongside the genuine article.

But in a statement released by the European Court of Justice on Tuesday, adviser and Advocate General Poiares Maduro said that "Google has not committed a trademark infringement by allowing advertisers to select, in AdWords, keywords corresponding to trademarks."

Maduro's opinion is that the use of trademarks is limited to the selection of keywords internal to AdWords and as such only concerns Google and its advertisers. When selecting keywords, no product or service is being sold to the public, therefore, neither Google nor its advertisers are infringing on any trademarks, said Maduro.

In response to the concern that makers of imitation products can grab certain keywords, the Advocate General put the responsibility firmly in the hands of consumers.

"The mere display of relevant sites in response to keywords is not enough to establish a risk of confusion on the part of consumers as to the origin of goods or services," said Maduro in the statement. "Internet users are aware that not only the site of the trademark owner will appear as a result of a search in Google's search engine... These users will only make an assessment as to the origin of the goods or services advertised on the basis of the content of the ad and by visiting the advertised sites."

Maduro's opinion doesn't leave Google totally in the clear. Maduro said the company might be liable if found to feature content in AdWords that infringes on a trademark. But even in this case, the trademark owner would have to cite specific instances of damage to their trademarks in order to hold Google accountable.

Trademark issues over AdWords have plagued Google for years, both in the U.S. and especially in Europe where Louis Vuitton and others have taken the company in and out of court. French justice has generally found in favor of the trademark owners, usually ordering Google to pay a fine. But the issue has never been definitively settled.

In response to the latest round of legal squabbles, the French court has asked the European Court of Justice to now settle the issue.

The Advocate General's statement is not binding on the court, but the opinion is strongly considered. The court is now reviewing the case and will render its judgment at a later date.

Google offered an olive branch to rivals of its digital book efforts at a congressional hearing Thursday, but Amazon was having none of it.

David Drummond, Google's chief legal officer, testifies before Congress.

(Credit: Screenshot by Stephen Shankland/CNET)

The move involves a major point of contention in Google's project to bring books to the Internet and in a proposed settlement of class-action suits that author and publisher groups brought against the project. Specifically, Google announced a reseller program that would let competitors get some measure of the rights--and revenue--that Google itself could get through the settlement.

"Any bookseller--Amazon, Barnes & Noble, Microsoft--would be able to sell the books covered by the settlement," said David C. Drummond, Google's chief legal officer. Under the proposed settlement, Google would get 37 percent of revenue from e-books sold through its service, and through the reseller program, the reseller would get "the significant majority" of that 37 percent, Drummond said.

He announced the offer during a House Judiciary Committee hearing on digital books issues raised by Google Books project. If the settlement is approved, Google would get the right to sell not just books for which it had explicit agreements with rights holders, but also for out-of-print books that still are in copyright for which Google doesn't have explicit permission.

That blanket permission has worried some, notably Amazon, which has scanned 3 million books with permission and opposes the settlement. Drummond explicitly said Amazon would be allowed to participate the revenue-sharing program.

Amazon: No thanks
But Amazon indicated it's not interested after Judiciary Committee Chairman John Conyers, a Democrat from Michigan, asked the company's reaction to this "thrilling new piece of information" from Google.

Paul Misener, Amazon's vice president of global policy

(Credit: Screenshot by Stephen Shankland/CNET)

"The Internet has never been about intermediation," said Paul Misener, Amazon's vice president of global policy. "We're happy to work with rights holders without anybody else's help."

The hearing revealed some representatives, including the chairman, to be allies of Google. Also generally speaking in favor of Google's work were Zoe Lofgren and Brad Sherman, both Democrats from California.

"It is a good thing to provide millions of Americans access to published works that otherwise wouldn't be available to them," Conyers said. "A library available to every household with an Internet connection--this could be the greatest innovation in book publishing since the Gutenberg press."

But a high-profile opponent emerged in Marybeth Peters, the register of copyrights at the U.S. Copyright Office.

"By permitting Google to engage in an array of new uses, the settlement would alter the landscape of copyright law," in effect subjecting authors to "compulsory licenses" for their works, Peters said.

"Compulsory licenses are the domain of Congress, not the courts," she said, adding that the settlement could cause diplomatic stress for the United States because foreign authors' books are in U.S. library collections that Google is scanning.

Opting in or out
Google wants to be able to sell electronic books online and has scanned 10 million books since 2004 as part of the program. About 2 million are out of copyright, meaning Google and anyone else may do as they like with them; about 2 million are in copyright and in print, with Google establishing permission from rights holders; and about 6 million are in copyright and out of print. It's this last category that's so contentious--particularly in the case of "orphaned" books, whose rights holders can't be located.

Misener specifically objected to the way in which the class-action suit would give Google the right to sell access to the in-copyright, out-of-print books without obtaining permission first.

Google is the only entity in the world that could approach copyright as an opt-out mechanism," Misener said, meaning that authors and publishers are included in the Google project by default. "Everybody else faces the current legal regime, which is opt-in."

Marybeth Peters, the register of copyrights at the U.S. Copyright Office

(Credit: Screenshot by Stephen Shankland/CNET)

Sharing Misener's concerns was Rep. Hank Johnson, a Democrat from Georgia. "I'm troubled by the exclusive access Google will have to orphaned works. Why should Google be the only entity permitted to sell orphaned works?" he asked. And he believes the case in the courts could edge in on the job of his own branch of government.

Orphaned works rights-holders aren't completely ignored in the proposed settlement, though. It would create a nonprofit organization called the Books Rights Registry that would collect sales revenue--minus Google's cut--and use that money to locate missing rights holders of and compensate them and other rights holders.

Google argues its program will let millions of out-of-print books generate revenue once again, including orphaned works. Reinforcing Google's point, Sherman criticized Amazon for focusing on digitizing bestsellers but not bothering to bring other books to the electronic realm.

Misener stood by Amazon's position, though. "We are not scanning books for which rights holders cannot be found in advance. That's the way the law requires," he said.

Sherman countered by likening the orphan-works situation to that of unclaimed property. "We want unused property and unclaimed property to be made use of, and we want the ultimate owner to be compensated when found," he said. "To say all that knowledge should be locked up and unavailable to humankind doesn't seem to be in the interest of knowledge."

Congress or the courts?
Conyers indicated he doesn't see the orphaned-works issue as an issue that can't be resolved.

House Judiciary Committee Chairman John Conyers

(Credit: Screenshot by Stephen Shankland/CNET)

"My primary concern is because Google reached this settlement, they now have exclusive access to orphaned works," Conyer said. "This can be remedied by legislation."

Such legislation hasn't been easy to come by, though. The House and Senate have worked on it in recent years but have yet to pass any new law. Google's proposed settlement raises the issue that for one company at least, the orphan-works issue could be settled in the judicial branch of government rather than the legislative branch.

"The best protection of the prerogatives of the legislative branch is for us to legislate. Since we have haven't done very effectively the legislation on the orphaned works, it's hard for me to condemn the courts to have a case before it that determines what can be done and can't be done with orphaned works," said Rep. Mel Watt, a Democrat from North Carolina.

Johnson disagreed. "The settlement is coming very close to whittling away the powers of the U.S. Congress. The treatment of orphaned rights holders is a matter that should be determined by Congress," he said.

Things get even more complicated, too: the executive branch, in the form of the Justice Department, is investigating the proposed Google Books settlement.

For its part, Google has no objection to legislation--even if it grants competitors rights to the same books the proposed settlement would give it access to. "We support Congress going in and legislating around that," Drummond said.

Updated at 11:15 a.m. PDT with further detail from the hearing.

Faced with issues ranging from online ads to copyright laws, Google spent $950,000 lobbying Washington in the second quarter, according to a federal government database.

The amount compares with the $880,000 that Google spent on lobbying in the first quarter--and the $2.84 million it spent for all of 2008.

Among the issues that Google lobbied on: intellectual property, copyright related to the Google Book Search settlement, and privacy and competition surrounding online advertising.

Google has been under fire from the Justice Department over the company's settlement of a lawsuit with book publishers on digital rights issues.

Washington is also thinking of limiting the type of information that online advertisers can collect from consumers, according to a Wall Street Journal blog on Google's lobbying efforts. That's another hot button topic for Google, which depends on Internet ads for 97 percent of its sales.

"There is a growing number of issues being debated in Washington affecting the Internet and our users, and we feel it is important to be involved in those debates," said Adam Kovacevich, a Google spokesman told the Journal.

Although Google has upped its lobbying budget, other high-tech giants still pay more, according to the federal database: Microsoft spent $1.89 million to lobby in the second quarter, IBM paid $1.34 million, AT&T spent $3.06 million, and Verizon Communications and Verizon Wireless combined shelled out $4.37 million.

The government's searchable database of lobbying activity is available on the U.S. Senate Web site.

(via Wall Street Journal)

A court in the United Kingdom has ruled Google isn't on the hook for defamatory information in its search results, saying the company facilitates access to the information but isn't a direct publisher.

The High Court judge, David Eady, offered his conclusion Thursday in a case pitting Metropolitan International Schools, a distance learning company, against Google UK and its U.S. headquarters. The school had argued that a posting on Digital Trends forums calling one class a "scam" was defamatory, and that Google was liable too since a snippet from the forum appeared in its search results.

However, the judge found Google--the third defendant in the case--is merely a conduit to the information, not a publisher in its own right.

"When a snippet is thrown up on the user's screen in response to his search, it points him in the direction of an entry somewhere on the Web that corresponds, to a greater or lesser extent, to the search terms he has typed in. It is for him to access or not, as he chooses. It is fundamentally important to have in mind that the Third Defendant has no role to play in formulating the search terms...It has not authorised or caused the snippet to appear on the user's screen in any meaningful sense. It has merely, by the provision of its search service, played the role of a facilitator.

In addition, the judge drew a physical-world analogy with somebody compiling a card catalog.

If a scholar wishes to check for references to his research topic, he may well consult the library catalogue. On doing so, he may find that there are some potentially relevant books in one of the bays and make his way there to see whether he can make use of the content. It is hardly realistic to attribute responsibility for the content of those books to the compiler(s) of the catalogue.

Legal liability for search results is a complicated area. Search results can reveal unflattering or controversial descriptions of people, can make it difficult for companies to control use of their trademarks, and otherwise reveal information that individuals or organizations would prefer not be discovered. However, in cases where search results are modified, such as in China, search engines face accusations that they're screening out important information.

Update 4:52 p.m. PDT: Google was happy with the ruling. The company said in a statement:

We are pleased with this result, which reinforces the principle that search engines aren't responsible for content that is published on third party websites. Mr Justice Eady made clear that if someone feels they have been defamed by material on a Web site then they should address their complaint to the person who actually wrote and published the material, and not a search engine, which simply provides a searchable index of content on the Internet.

Via the Guardian.