Updated on Friday, July 03, 2009, 22:19 IST

New York, July 03: The US government has initiated an anti-trust investigation into the proposed USD 125 million- deal between Google and book publishers related to copyright issues.

Google reached a settlement with the Authors Guild and the Association of American Publishers for about USD 125 million in October 2008, whereby the copyright owners would be compensated in return for displaying and selling their works online.

The agreement inked last year is subject to review by a Federal Court.

In a letter to the New York District Court, the US said it has opened an anti-trust probe into the proposed deal between Google and representatives of publishers and authors.

"At this preliminary stage, the US has reached no conclusions as to the merit of those concerns or more broadly what impact this settlement may have on competition.

"However, we have determined that the issues raised by the proposed settlement warrant further inquiry," the letter written by Deputy Assistant Attorney General William F Cavanaugh said.

The deal would provide Google the right to display and sell the books online while the profits would be shared between the internet major, publishers and authors. According to the letter, the US also "expect to have on-going discussions with the parties, as well as other interested persons, in order to assess the competitive impact of the proposed settlement," the letter said.

The settlement was reached after allegations from authors and publishers that Google's initiative to digitise books and make them available online would result in copyright violations.

Bureau Report