State attorneys general are looking into a proposed settlement Google Inc reached with author and publisher groups allowing the Internet company to digitize millions of books, a participant in a recent discussion of the matter told Reuters on Friday.

A group of state attorneys general discussed the deal in a one-hour conference call on Tuesday, said Peter Brantley, director of the Internet Archive.

The U.S. Justice Department is also making inquiries about the deal Google struck to settle copyright disputes arising from its project to put millions of books on the Internet.

But the deal has come under fire because it is silent on what Google would eventually charge libraries, who fear the service will become a very pricey must-have.

There was no indication that there was any specific activity planned, by the attorneys general, said Brantley, whose nonprofit Internet Archive also digitizes books in addition to building a digital library of Internet sites.

Google has said the settlement would expand access to millions of books.

The Department of Justice and several state attorneys general have contacted us to learn more about the impact of the settlement, and we are happy to answer their questions, a Google representative said in an e-mailed statement.

Critics of the settlement say it would also allow Google -- and only Google -- to digitize so-called orphan works, which could pose an antitrust concern.

Orphan works are books or other materials that are still covered by U.S. copyright law, but it is not clear who owns the rights to them.

My impression is that the questions focused mainly on fact gathering, said Brantley of Tuesday's discussion. He said there was talk over whether the authors of orphan works were adequately represented in the settlement.

Under a proposed settlement reached last October between Google and the Authors Guild and the Association of American Publishers, Google agreed to pay $125 million to create a Book Rights Registry, where authors and publishers can register works and receive compensation from institutional subscriptions or book sales. A court must still approve the settlement.

(Reporting by Diane Bartz; Editing by Tim Dobbyn)

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