Works will only feature in Google Books if they have been registered in the US or come from the UK, Australia or Canada, according to the new settlement, struck in New York last week.
"The changes will mean that 95% of all foreign works will no longer be included in Google's digital book archive," Richard Sarnoff, chairman of the Association of American Publishers, told the FT.
Many European countries had voiced concerns that Google Books will harm Europe's publishing industry (EurActiv 27/05/09), with France and Germany among those fearing that the project does not adequately respect European law on the protection of author’s rights.
Meanwhile, Google's competitors are resentful of the US giant's quasi-monopoly over the nascent digital books market.
In an earlier deal struck with the Authors Guild and the Association of American Publishers in October 2008, Google agreed to pay $125 million to create a Book Rights Registry, where authors and publishers can register works and be compensated by institutional subscriptions or book sales.
Under the terms of that settlement, all works – including those that had never been published in the US – would have been eligible for inclusion in Google's project unless the rights holders were to explicitly opt out of the scheme.
But the US Justice Department decided to investigate that deal amid concerns that it contravened copyright and antitrust law, despite recognising the potential of Google Books "to breathe life into millions of works that are now effectively off limits to the public".
Under Friday's agreement, Google Books will only include works registered in countries which have "contributed the largest number of English-language works to American libraries," made possible by similarities in their legal systems and the structure of their publishing industries.
Publishers in the UK, Canada and Australia will be represented on the board overseeing the rights registry alongside their US counterparts.
Google's opponents - represented by the Open Book Alliance, which includes Microsoft and Amazon - were quick to slam the latest developments as a "sleight of hand".
"Fundamentally, this settlement remains a set-piece designed to serve the private commercial interests of Google and its partners. None of the proposed changes appear to address the fundamental flaws illuminated by the Department of Justice and other critics that impact public interest," said Open Book Alliance co-chair Peter Brantley.
'Orphan works' deal
Controversy has been rife over the issue of so-called 'orphan works': books which are out-of-print or whose author cannot be traced.
Friday's deal stipulates that any money made from such works must be held for ten years in case details of the copyright holder emerge, after which time any unclaimed money will be shared among charities in the US, Canada, Australia and the UK.
A proportion of the revenue generated from unclaimed works must also be used by Google to search for rights holders.
The settlement allows Google to use its registry to sell individual online subscriptions, digital downloads and print-on-demand services.