Google's plan to change the deal comes after the US Government, through its Department of Justice (DoJ), said that it opposed the deal.
Google wants to create a digital database of the world's scanned-in books. It is free to scan out of copyright works but must receive copyright holders' permission for books still in copyright.
Last year's deal with authors' and publishers' groups gave it the right to scan in copyrighted books that were either out of print or those whose copyright owners cannot be traced. The latter books are called 'orphan' works.
The DoJ said in a submission to the US District Court for the Southern District of New York, which will hold the 'fairness hearing', that the deal strayed into territory more usually occupied by Government, and that it was unacceptable.
"A global disposition of the rights to millions of copyrighted works is typically the kind of policy change implemented through legislation, not through a private judicial settlement," said the DoJ's submission. "If such a significant (and potentially beneficial) policy change is to be made through the mechanism of a class action settlement (as opposed to legislation), the United States respectfully submits that this Court should undertake a particularly searching analysis to ensure that the requirements of Federal Rule of Civil Procedure 23 ('Rule 23') are met and that the settlement is consistent with copyright law and antitrust law. As presently drafted, the Proposed Settlement does not meet the legal standards this Court must apply."
"Because the parties, after consultation with the DOJ, have determined that the Settlement Agreement that was approved preliminarily in November 2008 will be amended, plaintiffs respectfully submit that the Fairness Hearing should not be held, as scheduled, on October 7," said a Court submission by the Authors Guild and Association of American Publishers.
Writers and publishers had pursued a class action case for copyright infringement against Google. A class action lawsuit is one in which many people in the same situation take a single case and can result in an award of massive damages to be shared among the class.
Google's deal last year with publishers and writers was intended to resolve that class action suit, but it requires the Court's approval. That is the purpose of the 'fairness hearing'.
Not every company involved in publishing approves of the deal, though. The Open Book Alliance, whose members include Yahoo!, Amazon, Microsoft, the Internet Archive and the National Writers' Union, opposes the deal.
"This is a huge victory for the many people and organizations who raised significant concerns that this settlement did not serve the public interest, stifled innovation, and restricted competition," said an Open Book Alliance statement. "It’s also an enormous loss for Google, which had been saying for months that no changes were necessary to the settlement. Now, that settlement, as we know it, is dead."
The DoJ conceded in its Court submission that the Google deal would have some positive effects and that some kind of settlement should be possible.
"The Proposed Settlement has the potential to breathe life into millions of works that are now effectively off limits to the public. By allowing users to search the text of millions of books at no cost, the Proposed Settlement would open the door to new research opportunities," it said.
The DoJ expressed concern, though, that the settlement is designed to govern future behaviour, whereas the class action structure is intended to settle disputes about past behaviour.
The US Government also said that it had competition law concerns. "Through collective action, the Proposed Settlement appears to give book publishers the power to restrict price competition," it said. "As a result of the Proposed Settlement, other digital distributors may be effectively precluded from competing with Google in the sale of digital library products and other derivative products to come."