Though there was general agreement that Google's attempt to digitize books through scanning and computer-aided recognition for searching online was seen as a transformative step for libraries, many authors and publishers had expressed concern that Google had not sought their permission to make scans of the books still under copyright and offer them to users.

Google worked with the litigants in both suits to develop a settlement agreement (the Google Book Search Settlement Agreement) that would have allowed it to continue the program through paying out for works it had previously scanned, creating a revenue program for future books that were part of the search engine, and allowing authors and publishers to opt out.

The settlement received much criticism as it also applied to all books worldwide, including works that may have been out of print but still under copyright, and may have violated antitrust aspects given Google's dominant position within the Internet industry.

A reworked proposal to address some of these concerns was met with similar criticism, and ultimately the settlement was rejected by 2011, allowing the two lawsuits to be joined for a combined trial.

Despite Google taking measures to provide full text of only works in public domain, and providing only a searchable summary online for books still under copyright protection, publishers maintain that Google has no right to copy full text of books with copyrights and save them, in large amounts, into its own database.

[7] Google countered that its project represented a fair use and is the digital age equivalent of a card catalog with every word in the publication indexed.

[16] The estate of John Steinbeck argued for and was granted an additional four-month extension for the class to file objections, putting the deadline into October 2009 and with Judge Chin expected to evaluate the settlement in November.

[25] Privacy advocates from EFF and American Civil Liberties Union also raised concerns that Google would track users of its book services.

In a journal article, MIT Professor Jerry A. Hausman and Criterion Economics Chairman J. Gregory Sidak conclude that the service will be unable to exercise market power.

Hausman and Sidak believe that Google Book Search should, on net, yield a significant gain in consumer surplus.

"[32][33] In October 2009, Google countered ongoing criticism by stating that its scanning of books and putting them online would protect the world's cultural heritage; Google co-founder Sergey Brin stated, "The famous Library of Alexandria burned three times, in 48 BC, AD 273 and AD 640, as did the Library of Congress, where a fire in 1851 destroyed two-thirds of the collection.

"[34] This characterization was criticized by Pam Samuelson, UC Berkeley Professor of Law[35] saying Libraries everywhere are terrified that Google will engage in price-gouging when setting prices for institutional subscriptions to GBS contents ... Brin forgot to mention another significant difference between GBS and traditional libraries: their policies on patron privacy.

Copyright Office or published in the UK, Canada, or Australia,[38] added board members to the Books Rights Registry from the UK, Canada, and Australia, gave the rightsholder the ability to renegotiate the revenue share, gave Google added flexibility in discounting, and created a fiduciary to hold payments due to orphan works.

[42][43] On March 22, 2011, Judge Chin issued a ruling on the amended settlement agreement, rejecting it due to concerns on copyright, antitrust, privacy, and international law.

Indeed, the ASA would give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in the case.

[46]Chin urged that the settlement be revised to one whether authors "opt-in" to having their works digitized rather than "opt-out", and arranged for followup status conferences to discuss next steps with all parties.

[47] During a July 2011 status conference the parties attempted to "reassure Judge Chin that the negotiations were making real progress," and Judge Chin scheduled another status conference for September 15, urging the parties to come to an acceptable opt-in agreement or face a "tight discovery schedule".

[48] By September 2011, Chin established a schedule for a discovery phase for the pending trial to be heard by jury in July 2012 while the parties attempted to continue to find some type of settlement terms.

[49] Just prior to the planned jury trial, with the parties unable to come to any settlement terms, Judge Chin granted the case its class-action status in May 2012, which asserted that the Authors Guild had standing for the class members.

On November 14, 2013, Judge Chin issued his ruling on the parties' cross-motions for summary judgment, and in effect dismissed the infringement lawsuit, holding that Google's use of the works was 'fair use' under copyright law.

[57] Oral arguments were held on December 3, 2014, before Judges Pierre N. Leval, José A. Cabranes, Barrington Daniels Parker, Jr.[58] On October 16, 2015, the Second Circuit unanimously affirmed the judgment in Google's favor.

The substantive questions are: On April 18, 2016, the Supreme Court denied the petition for writ of certiorari, leaving the Second Circuit ruling in Google's favor intact.

The HathiTrust case differed in two primary factors which were raised by the plaintiffs: that for viewers with disabilities, they could view the scanned text through a screen reader to make it easier to read, and offering to print out the scans as replacement copies for members of the universities if they could verify their original copies were lost or damaged.

[64] The ruling, finding Google's approach to be fair use, alongside Authors Guild, Inc. v. HathiTrust has been used as the basis of controlled digital lending (CDL).

[66] The CDL concept has not been tested in courts, and a lawsuit against the Open Library for copyright infringement was initiated by four publishers in June 2020.