The proposed agreement "creates a cartel of authors and publishers ... operating with virtually no restrictions on its actions, with the potential to raise book prices and reduce output to the detriment of consumers and new authors or publishers who would compete with the cartel members," said Amazon's complaint, filed in the US.
Google and a group of book publishers and authors came to an agreement about how to manage Google's efforts to scan books and make them digitally available after the publishers sued the search giant for copyright infringement. The settlement proposal, reached last October, is under review by the court.
Amazon, which itself has scanned millions of books, argues that the settlement violates federal antitrust laws by establishing Google as the exclusive distributor of electronic copies of 'orphan' works. Orphan books are those that are still in copyright but whose authors cannot be found.
"A court cannot approve a class action settlement that violates federal antitrust laws," Amazon said in the letter. The settlement agreement proposes to set up a nonprofit Book Rights Registry, funded in part by Google, that would set the price for digital versions of orphan works as well as subscription rates for access to libraries of books.
The agreement does not preclude another company from setting up a similar arrangement, but detractors say it would be extremely difficult for another organisation to strike the same type of deal with the publishing industry, so Google would be left with an effective monopoly over the digital copies of the books.
Other letters of opposition to the settlement appeared this week from the German government, the daughter of science-fiction writer Philip K. Dick, folk singer Arlo Guthrie, groups representing professional photographers and publishing houses in the Netherlands.
The settlement does have its supporters. European Commissioner Viviane Reding said she supports the settlement agreement, as has e-book developer Sony.
The court is accepting objections to the proposed settlement until 8 October.