Google Inc, criticized for scanning books without copyright permission, has said it would open its digital library to rivals and bookstores, the search engine giant said on Thursday.

Google made the announcement at a hearing of the U.S. House of Representatives Judiciary Committee that had been called to discuss criticism of a 2008 settlement between the Authors Guild and Google on the grounds the deal to allow Google's massive scanning project created antitrust concerns, infringed copyrights and potentially posed privacy concerns.

Google will host the digital (out-of-print) books online, and retailers such as Amazon, Barnes & Noble or your local bookstore will be able to sell access to users on any Internet- connected device they choose, Google said in a statement.

The announcement would affect most of the books available through the Google book scan project since most authors with books in print would decide not to sell through Google, said Paul Aiken, head of the Authors Guild.

Asked if this was a major change in the deal, David Drummond, Google's chief legal officer, told Reuters: It is and it isn't. We always had this vision that we were going to be open.

In the hearing itself, Google came under tough criticism from Marybeth Peters, register of copyrights for the U.S. Copyright Office, who told the committee that Google's plan to digitize millions of books as part of a class action settlement wrongly creates a virtually compulsory license for books.

Peters said the Copyright Office originally viewed the agreement as positive, but soon shifted its view because the class action settlement covered future behavior instead of just redressing past actions.

The settlement would alter the landscape of copyright law, she told lawmakers in written testimony. The settlement would bind authors, publishers, their heirs and successors to these rules, even though Google has not yet scanned and may never scan their works.

Peters argued Google would inappropriately be allowed to put out-of-print books on Google Books without seeking permission from the copyright holders.

For Google to show entire books without permission is indisputably an act of copyright infringement, she said.

Peters also argued that non-U.S. authors were included in the class, sometimes because one copy of a book was in a research library. Germany and France oppose the proposed settlement.

In his testimony, Google's Drummond said Google was fully compliant with copyright law.

Google's plan to scan entire research libraries prompted a 2005 lawsuit filed by the Authors Guild, accusing Google of copyright infringement. A proposed settlement to resolve the lawsuit will be discussed on October 7 in Manhattan federal court.

Rival companies, privacy advocates and some libraries and small publishers have accused Google of violating antitrust law to dominate the digital book market. The U.S. Justice Department is looking into their concerns.

The case is Authors Guild et al v Google Inc 05-08136 in U.S. District Court for the Southern District of New York (Manhattan)

(Reporting by Diane Bartz; editing by Gerald E. McCormick and Andre Grenon)

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