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New gTLDs not an illegal conspiracy, court rules

Kevin Murphy, August 5, 2015, Domain Policy

ICANN has beaten off a lawsuit from alternate root provider name.space for a second time, with a US appeals court ruling that the new gTLD program was not an illegal conspiracy.

name.space sued ICANN in 2012, claiming that the program broke competition laws and that “conflicted” ICANN directors conspired with the industry in an “attack” on its business model.

The company runs an alternate DNS root containing hundreds of TLDs that hardly anyone knows about, cares about, or has access to.

Almost 200 of the strings in its system had matching applications in the 2012 new gTLD round; many have since been delegated.

The company’s complaint asked for an injunction against all 189 matching TLDs.

But a court ruled against it in 2013, saying that name.space had failed to make a case for breaches of antitrust law.

Last week, an appeals court upheld that ruling, saying that the company had basically failed to cross the legal threshold from simply making wild allegations to showing evidence of an illegal conspiracy.

“We cannot… infer an anticompetitive agreement when factual allegations ‘just as easily suggest rational, legal business behavior.’,” the court ruled, citing precedent.

“Here, ICANN’s decision-making was fully consistent with its agreement with the DOC [US Department of Commerce] to operate the DNS and the Root,” it wrote. “In transferring control to ICANN, the DOC specifically required it to coordinate the introduction of new TLDs onto the Root. This is exactly what ICANN did in the 2012 Application Round”.

“The 2012 rules and procedures were facially neutral, and there are no allegations that the selection process was rigged,” the panel ruled.

The court further ruled that ICANN is not a competitor in the markets for domain names as registry, registrar or defensive registration services, therefore it could not be subject to antitrust claims for those markets.

A few other claims against ICANN were also dismissed.

In short, it’s a pretty decisive victory for ICANN. General counsel John Jeffrey said in a statement that ICANN is “pleased” to have won.

All the major documents in the case, including the latest opinion, can be downloaded here.

While the lawsuit has been making its way through the courts, the .space gTLD has actually been delegated and the domain name.space is owned by its new registry, Radix.

There’s some salt in the wounds.

Company files for injunction against 189 new gTLDs

Kevin Murphy, October 12, 2012, Domain Registries

Alternate root player Name.Space has sued ICANN for trademark infringement and anti-competitive behavior, saying “insiders” have conspired to keep it out of the new gTLD program.

If successful, the suit would prevent dozens of new gTLD applicants from having their applications approved.

The lawsuit, filed in California this week, follows a warning the company fired at ICANN this March.

While only ICANN is named as a defendant, the suit alleges that the new gTLD program was crafted by and is dominated by “ICANN insiders” and “industry titans”.

It wants an injunction preventing ICANN delegating any of the 189 gTLD strings that it claims it has rights to.

It also fingers several current and former ICANN directors, including current and former chairs Steve Crocker and Peter Dengate Thrush, over their alleged conflicts of interest.

Name.Space has been operating 482 diverse TLDs — such as .news, .sucks, and .mail — in a lightly used alternate root system since 1996.

Most people can’t access these zones and are unaware that they exist.

The company applied to have 118 of these strings added to the root in ICANN’s “proof of concept” gTLD expansion in 2000, when the application fee was $50,000, but was unsuccessful.

Now, the company claims the new gTLD program is “an attack on name.space’s business model and a mean by which to create and maintain market power in the TLD markets”.

The complaint (pdf) states:

Rather than adopting a procedure to account for the pending 2000 Application and facilitate the expansion of TLD providers in the DNS, ICANN has adopted a procedure so complex and expensive that it once again effectively prohibited newcomers from competing. It instead has permitted participation solely by ICANN insiders and industry titans.

If it had applied for all 118 again in this year’s round, it would have cost almost $22 million (though it would have qualified for an $83,000 discount on a single bid).

Name.Space is asking for damages and an injunction preventing ICANN from approving 189 gTLDs that match those it currently operates in its alternate root.

The full list of affected applications is attached to the complaint.