VeriSign has successfully had an antitrust lawsuit, which claims the company has been raising .com domain name prices anti-competitively, dismissed by a California court.
While it’s encouraging news if you’re a VeriSign shareholder, the Coalition for ICANN Transparency, which filed the suit, will be allowed to amend and re-file its complaint.
The basis for the dismissal (pdf) goes to the central irony of CFIT – the fact that, despite its noble name, it’s not itself a particularly transparent organization.
CFIT was set up in 2005 in order to sue ICANN and VeriSign over their deal that gave VeriSign the right to raise the price of .com and .net domains, and to keep its registry contracts on favorable terms.
While it was cagey about who was backing the organization, those of us who attended the ICANN meeting in Vancouver that year knew from the off it was primarily a front for Momentous.ca, owner of Pool.com and other domainer services.
In dismissing the case last Friday, Judge Ronald Whyte decided that CFIT’s membership is vague enough to raise a question over its standing to sue on antitrust grounds. He wrote:
By failing to identify its purported members, CFIT has made it impossible to determine whether the members are participants in the alleged relevant markets, or whether they have suffered antitrust injury. Because the [Third Amended Complaint] identifies no members of CFIT, it must be dismissed.
While CFIT had disclosed some time ago Pool.com’s involvement, it recently tried to add uber-domainer Frank Schilling’s Name Administration Inc and iRegistry Corp to the list of its financial supporters.
But Whyte was not convinced that the two companies were CFIT “members” with standing to sue.
Whyte decided that CFIT’s complaint, “fatally fails to allege facts showing that iRegistry or Name Administration were financial supporters or members at the time the complaint was filed”.
He also denied CFIT’s demand for a jury trial.
CFIT wants VeriSign to return all the excess profits it has made on .com registrations since it started raising its prices above $6.
If CFIT were to win, it would severely curtail VeriSign’s ability to grow its registry business, and could lead to billions being wiped off its accounts.
The organization has been given leave to file a fourth amended complaint, so it’s not over yet.