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I don't think it's quite that simple.

I can't just scrape nytimes.com and re-host it on my own website legally - that's clear copyright infringement. Google news quoting article excerpts was legally controversial, as was their book search function, and their archive option.

I always assumed website owners were just sorta turning a blind eye to archive.org because (a) it's slow and (b) it doesn't get indexed in google

Right but thats not whats happening here.

IA is physically holding a physical copy of the book, and then on a 1 at a time basis, allowing digital access to that physical book.

It would be like, purchasing a copy of the new york times, scanning it, and letting people online read it one at a time. Which would be perfectly legal except for the scanning and online. It paints the law as insane, not IA as flagrant copying.

I'm very happy about this decision about CDL and I'm glad that the IA got smacked for being so obnoxious and anti-artist. But I'm also willing to turn a blind eye to the archive and the way back machine because they're useful and not really competition.