The Justice Department has formally acknowledged an investigation into Google's settlement with publishers over its effort to digitize mass quantities of books. The New York Times and others have reported that Deputy Assistant Attorney General William Cavanaugh wrote to the federal judge administering the settlement, stating: "The United States has reviewed public comments expressing concern that aspects of the settlement agreement may violate the Sherman Act... At this preliminary stage, the United States 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 $125 million agreement was signed in October to resolve a 2005 class action lawsuit filed by the Authors Guild and the Association of American Publishers against the Internet giant. In the complaint, the authors and publishers said Google's plan to digitize millions of books from libraries and make them available in its Book Search service amounted to a whopper of a copyright violation. The settlement would let Google display books online and profit from them by selling access to titles and by selling subscriptions to its collection. Authors and publishers would get a chunk of the revenue. U.S. District Judge Denny Chin set a Sept. 18 deadline for the government to offer its views in writing. He has scheduled an Oct. 7 hearing on the settlement.