"Too big to fail" was the mantra for the government bailout of the big banks. "Too big" is also the question raised by Google's explosive growth and the settlement it has negotiated with most publishers to sell its scanned out-of-print books in return for a large payment link here. The public policy dilemma is the huge efficiencies of scale that have come to the first entrant. Google's market power has become immense. Can it be reigned in? Is that desirable? The Department of Justice is presumeably looking at these questions as it has asked for more information on the proposed settlement.

Riding a wave of innovation and a flood of investment money, Google emerged as the dominant internet search engine. It has gone on to provide software and on line services that are essentially free, based on advertising revenue and low costs derived from new technology. But without competition, will it remain free?

What about the libraries, only a handful of which have provided the books for Google to scan, and most of which will have to pay to offer their users access to the scanned texts. The participating libraries are mostly university supported, but the tax-supported public libraries will have to pay for access, as will individuals. Given that it is going to have a near-monopoly, what should public policy be on what they can charge?

And once again we come up with the question posed by copyright, giving publishers and owners a claim on an income stream that would not otherwise have existed. There is no clear public benefit from paying them. The owners will provide no service to receive this bonanza. Nor is the public interest protected to achieve the lowest possible price, consistent with providing the service, the marginal cost to the provider.