YouPorn owner arrested in tax evasion probe

YouPorn owner and regular ICM Registry antagonist Fabian Thylmann has reportedly been arrested in Belgium in connection with a German tax evasion investigation.
He was taken into custody at Brussels airport today under a warrant from the Cologne District Court, according to German daily Die Welt.
Thylmann is the owner — some say nominally so — of Manwin Licensing, the online porn empire behind brands such as YouPorn, Brazzers and, under license, Playboy.
Manwin sued ICANN and ICM late last year over the .xxx gTLD, saying it violates US antitrust laws, charges which are denied.
The company is also engaged in an ICANN Independent Review Panel procedure over the same issues.
ICM says that the lawsuit, and a related boycott, are merely attempts to disrupt its business. Thylmann, the company claims, offered to invest in ICM but was rebuffed.
According to Die Welt, Manwin’s German headquarters was raided last Tuesday as part of an ongoing tax evasion probe, which was spurred in part by the newspaper’s own investigation into the company.

Russian iTunes Store infiltrated by .xxx banners after snafu [NSFW]

Russian iTunes users reportedly got a shock today when they discovered masses of sexually explicit content from the .xxx gTLD in their iTunes Store.
According to local reports, attempts to visit a part of the store dedicated to foreign movies displayed a bunch of banner ads for .xxx web sites instead of the expected content.

@arcoolov @markgurman @9to5mac This is NOT a joke. How do you explain replies in the comments? A legitimate issue twitter.com/iphones_ru/sta…

— iphones.ru (@iphones_ru) December 5, 2012

Digging a little deeper, it appears that the images were being drawn directly from xxx.xxx, a promotional directory site owned and managed by ICM Registry, the .xxx registry.
Speculation in the Apple blogs is that an iTunes Store developer inadvertently typed “xxx.xxx” somewhere as a placeholder URL, not realizing that .xxx is actually a live TLD.
There’s a lesson here for new gTLD registries somewhere, I’m sure.

ICM has already sold $200k of premium .xxx names

Contrary to some reports, ICM Registry has in fact already seen several sales of premium names from its recently published buy-it-now price list.
Judging by the changes to the list since it was revealed three weeks ago, at least eight domains have been sold for a total of $55,755.
Two new domains — trannyporn.xxx and trannys.xxx — have been added to the list, and a handful of others have had their prices increased, by a total value of $73,820.
These are the domains we’ve managed to establish were sold, along with their original list prices:

888.xxx ($1,320)
bet.xxx ($3,465)
celebrities.xxx ($15,015)
ddd.xxx ($330)
freeliveporn.xxx ($330)
massage.xxx ($18,810)
moms.xxx ($15,000)
own.xxx ($1,485)

Some domains appear to have been repriced, adding almost $74,000 to the total value of the $7.7 million pot. For example, highdefinition.xxx is now listed at $19,000, up from $2,500.
According to ICM, not all of the sold domains have been removed from the published list yet. President Stuart Lawley said a total of over $200,000 has been taken so far.
ICM came in for a bit of criticism from one early .xxx adopter last month, when six-figure investor Mike Berkens accused the company of damaging the TLD by capping prices too early.
There are still over 1,000 available names on the list.

ICM to intro sponsored search results with $75 credit for registrants

Tearing several chapters out of the Google playbook, ICM Registry is to introduce a sponsored search placement service for .xxx registrants, along with a substantial introductory credit.
The company will give each registrant a $75-per-domain credit against its forthcoming search platform, which in many cases will completely offset the cost of their .xxx domain.
As has been pointed out elsewhere, it’s the AdWords model for porn, following on from the recent launch of search.xxx, which ICM says has already had more than 12 million page views.
The ad system is expected to roll out in “early 2013”, but ICM has launched the credits incentive now in order to get early registrants to renew their domain names.
The vast majority of .xxx’s roughly 140,000 registrations occurred during its first two months of general availability and will be coming up for renewal in December and January.
That said, ICM had said even prior to this announcement that its early renewals were looking promising.
The ad credit will apply to all .xxx domains renewed or registered before January 31, 2013, ICM said in a press release.
The company has long talked about its plans for generating advertising and micropayment-based revenue. Over the long term, selling domains may prove to be a small part of its business.

ICM puts $7.7 million of .xxx domains up for sale

Having already sold over $5 million worth of premium .xxx domains names, ICM Registry is putting another 1,000 names on the market, with a total purchase price of over $7.7 million.
Unusually for registry-reserved names, which usually end up at auction, all of the names are priced to sell.
Prices range from $220,000 for girls.xxx to $330 for provide.xxx.
Along with the full list of available names, ICM has also published some rough guides to likely traffic, based on its data gleaned from running search.xxx for the last few weeks.
A “Search Rank” stat ranks the popularity of the relevant keyword in search.xxx queries, while “Traffic Rank” divides the list into five categories by likely traffic volume.
ICM privately sold about $4 million of premium .xxx domains during its pre-launch Founders Program. Domainer Frank Schilling is believed to have invested seven figures.
Its biggest single sale to date is believed to be gay.xxx, which was snapped up for $500,000 last year.
ICM CEO Stuart Lawley told DI that the company still has about 500 premium names — including cams.xxx and tube.xxx — held in reserve to be released at a later date.

ICM files $120m lawsuit over Manwin’s .xxx “boycott”

ICM Registry has counter-sued YouPorn owner Manwin Licensing, looking for at least $120 million in damages, saying the porn giant is using its market power to sideline the .xxx domain.
The company claims that Manwin’s antitrust lawsuit, filed last October, is merely one of several attacks against its business.
The counter-suit alleges that Manwin, after trying and failing to invest in ICM, illegally restrained trade by forcing its business partners not to do business with ICM.
The suit (pdf) reads:

Manwin has utilized its dominance in the adult entertainment industry to encourage the wholesale boycott of the .XXX TLD in the industry in order to destroy any competition tat may arise from the commercialization of .XXX and has secured agreement, either express or implied, by those within the industry that they will not do business with .XXX.

Manwin, for example, “coerced .XXX spokesmodels to end relationships with ICM” and “conditioned contracts with third parties on their non-involvement with the .XXX TLD”, according to ICM.
The counterclaims were filed in a California court on Friday, as the latest stage of the two companies’ ongoing legal battle.
The registry is looking for $40 million in damages for Sherman Act violations, trebled.
Manwin claims ICM and ICANN broke US competition law by setting up the .xxx “monopoly”, which both ICANN and ICM deny.

ICM hires Fausett to help with YouPorn antitrust case

ICM Registry has hired new lawyers to help it fend off the antitrust lawsuit filed against it by YouPorn owner Manwin Licensing.
Gordon & Rees senior partner Richard Sybert is taking over as lead counsel in the case, which relates to the launch of .xxx last year.
Notably, the new team includes long-time ICANN legal expert Bret Fausett of Internet.Pro, who represented the Coalition For ICANN Transparency in its antitrust case against ICANN and Verisign.
That’s a bit of a coup for ICM. Manwin’s recent legal arguments have relied heavily on the antitrust precedents Fausett helped set in the CFIT case.
Gordon & Rees replaces Wilmer Cutler Pickering Hale and Dorr as ICM’s outside counsel, due to the recent departure of Wilmerhale’s ICANN guru and ICM defender, Becky Burr.
Burr joined Neustar as its chief privacy officer in May.
Manwin sued ICM and ICANN last October, arguing that the launch of .xxx was little more than a shake-down.
Earlier this month, a California District Court judge ruled that ICANN is not immune from competition law and that the litigation can proceed.
The case will turn in part on the question of whether there’s a market for “defensive registrations” under competition law and whether ICANN and ICM illegally exploited it.

Court rules YouPorn can sue ICANN for alleged .xxx antitrust violations

A California court today ruled that ICANN is subject to US antitrust laws and therefore the lawsuit filed by YouPorn.com owner Manwin Licensing over the .xxx gTLD can proceed.
In a mixed ruling, the Central District of California District Court granted some parts of ICM Registry and ICANN’s motions to dismiss the case and rejected others.
Here’s what it had to say on the subject of antitrust law, which ICANN argued back in January did not apply to it because it “does not engage in trade or commerce”:

The Court finds the transactions between ICANN and ICM described in the First Amended Complaint are commercial transactions.
ICANN established the .XXX TLD. ICANN granted ICM the sole authority to operate the .XXX TLD. In return, ICM agreed to pay ICANN money.
This is “quintessential” commercial activity and it falls within the broad scope of the Sherman Act. Even aside from collecting fees from ICM under the contract, ICANN’s activities would subject it to the antitrust laws.

That’s a pretty definitive knock-back for ICANN’s ballsy opening manoeuvre.
The court is allowing Manwin’s claims against ICANN to proceed. Manwin has until September 9 to amend and re-file its complaint.
As you may recall, Manwin sued ICANN and ICM last November, alleging that they conspired to break competition law by, among other things, forcing companies to defensively register .xxx domains.
ICM and ICANN filed separate motions to dismiss the case on seven grounds, but according to today’s ruling only two of these requests were successful.
What strikes me as particularly interesting on a first read are the definitions of the relevant domain name markets.
Under the Sherman Act, antitrust allegations have to be based on a defined “market”. Manwin’s complaint was based on the markets for “defensive registrations” and “affirmative registrations”.
The court ruled today that the company failed make the case that “affirmative registrations” is a market — because Manwin is happily running hundreds of porn sites in .com:

The Court finds Plaintiffs have failed to adequately plead the affirmative registration market. Plaintiffs have not alleged why other currently operating TLDs are not reasonable substitutes to the .XXX TLD for hosting adult entertainment websites. To the contrary, Plaintiffs allege that Manwin’s own website YouPorn.com is the most popular free adult video website on the internet.

However, the court found that “defensive registrations” is a market for the purposes of this case.
I am not a lawyer, but my sense is that this (pdf) is important stuff.
Lawyers: do feel free to chip in in the comments or via email.

Christian group opposes .sex, .porn, .adult

Morality In Media, one of the groups that fought the approval of .xxx for years, has launched a letter-writing campaign against the proposed .sex, .porn and .adult top-level domains.
ICANN has received a couple dozen comments of objection to the three gTLDs over the last couple of days, apparently due to this call-to-arms.
Expect more. MIM was one of the main religion-based objectors to .xxx, responsible for crapflooding ICANN with thousands of comments in the years before the gTLD was approved.
Now that .xxx has turned out to be less successful than ICM Registry hoped, MIM feels its key belief on the subject — that porn gTLDs lead to more porn — has been vindicated.
MIM president Patrick Trueman wrote in one of his comments:

During the years of this fight against the .xxx domain, we said many times that the establishment of a .xxx domain would increase, not decrease the spread of pornography on the Internet, causing even more harm to children, families and communities, and make ICANN complicit in that harm.
That prediction has been fulfilled because the porn sites on the .com domain have not vacated the .com and moved to .xxx. Rather, as we have seen, the .xxx has just added thousand of additional porn sites on the Internet and .com porn sites stayed put. ICANN bears responsibility for this. The .xxx was not needed.

For some reason, the complaints are only leveled at the three ICM Registry subsidiaries that are applying for porn-themed gTLDs, and not the other .sex applicant.
Uniregistry’s application for .sexy has not been targeted.
And MIM has apparently not read the applications it is complaining about; its call to action complains about non-porn companies having to pay “protection money” to defensively register in .sex.
However, the three ICM bids explicitly contemplate an extensive grandfathering program under which all current defensive registrations in .xxx would be reserved in .sex, .porn and .adult.

YouPorn says ICANN not immune from .xxx antitrust

YouPorn owner Manwin Licensing has rejected ICANN’s claim to be immune from antitrust liability.
The company has told a California court that its lawsuit against ICANN and .xxx operator ICM Registry is little different from the landmark case Coalition For ICANN Transparency v Verisign.
Manwin sued ICANN and ICM last November, claiming the two illegally colluded to create a monopoly that, among other things, extorted defensive registration money from porn companies.
But ICANN has said in its attempts to have the case dismissed that the antitrust claims could not apply to it as, for one reason, it “does not engage in trade or commerce”.
Manwin’s oppositions to ICANN’s and ICM’s motions to dismiss rely heavily on the fact that the court allowed CFIT v Verisign, which challenged Verisign’s 2006 .com registry agreement, to go ahead.
Essentially, ICANN is trying to wriggle out of the suit on legal grounds at an early stage, but Manwin reckons there’s precedent for it to have to answer to antitrust claims.
You can read Manwin’s latest court filings here and here.
The case continues.