https://fingfx.thomsonreuters.com/gfx/legaldocs/lbvggjmzovq/internetarchive.pdf

[IA] professes to perform the traditional function of a library by lending only limited numbers of these works at a time through “Controlled Digital Lending,” … CDL’s central tenet, according to a September 2018 Statement and White Paper by a group of librarians, is that an entity that owns a physical book can scan that book and “circulate [the] digitized title in place of [the] physical one in a controlled manner.” … CDL’s most critical component is a one-to-one “owned to loaned ratio.” Id. Thus, a library or organization that practices CDL will seek to “only loan simultaneously the number of copies that it has legitimately acquired.”

…

Judging itself “uniquely positioned to be able to address this problem quickly and efficiently,” on March 24, 2020, IA launched what it called the National Emergency Library (“NEL”), intending it to “run through June 30, 2020, or the end of the US national emergency, whichever is later.” … During the NEL, IA lifted the technical controls enforcing its one-to-one owned-to-loaned ratio and allowed up to ten thousand patrons at a time to borrow each ebook on the Website.

[…]

The Publishers have established a prima facie case of copyright infringement.

First, the Publishers hold exclusive publishing rights in the Works in Suit …

Second, IA copied the entire Works in Suit without the Publishers’ permission. Specifically, IA does not dispute that it violated the Publishers’ reproduction rights, by creating copies of the Works in Suit … ; the Publishers’ rights to prepare derivative works, by “recasting” the Publishers’ print books into ebooks …; the Publishers’ public performance rights, through the “read aloud” function on IA’s Website …; and the publishers’ display rights, by showing the Works in Suit to users through IA’s in-browser viewer

Bold added.

It’s pretty much not in dispute that Internet Archive distributed the copyrighted works of the publishers without permission, outside of what even a traditional library lending system would allow.