According to the World Association of Domain Name Developers
(WADND) the two bodies have engaged in antitrust activities,
including conspiracy, monopolisation, illegal price fixing and
monopolising the .com and .net domain name markets.
A second suit, filed by the Coalition for ICANN Transparency
(CFIT) seeks to preserve the status quo and to prevent VeriSign
from expanding its control over the .com and .net top-level domain
name registries into highly competitive downstream and adjacent
markets, such as the resale of expired domain names.
The disputed settlement
The settlement targeted by both suits is the result of an
October agreement between ICANN, the body that coordinates the
world’s internet domain name system, and VeriSign. The agreement is
intended to heal the wounds caused by VeriSign’s surprise launch of
the controversial Site Finder service in September 2003.
That service redirected surfers to VeriSign's Site Finder search
engine when they entered a web address that was not registered on
the internet or was inactive. It was heavily criticised at the
time.
ICANN stepped in and, in the face of a threatened court action,
VeriSign agreed to suspend the service. It sued five months later,
alleging that ICANN had overstepped its contractual authority and
improperly attempted to regulate VeriSign's business in violation
of its charter and its agreements with VeriSign. ICANN
countersued.
However, in October, relations between the two organisations
improved when a planned settlement agreement was announced,
dismissing the legal actions. It also gave VeriSign control of the
.com domain until 2012, and permitted the registry to raise prices
by 7% a year from 2007.
The settlement, which has not yet been approved by the ICANN
board, was to be a major part of discussions at an ICANN conference
being held in Vancouver this week.
The WADND response
There has been some criticism of the agreement. According to the
WADND, the agreement would give VeriSign a “permanent monopoly over
the all .com and .net internet domain name registrations.”
Domain owners claim Verisign's monopoly already doubles the cost
of .com domains, and an anti-competitive agreement with ICANN will
raise costs another 50% over the next six years, argues the trade
group.
"There is no legitimate reason for these price increases," said
Patrick Cathcart, lawyer for the WDNAD. "ICANN and VeriSign are
trying to take advantage of the lack of government oversight and
line their pockets at the expense of domainers and domain
investors."
WADND filed suit on Monday in a California District Court.
The CFIT response
According to CFIT’s lawyer, Jesse Markham Jr:
“ICANN has vacated its government-mandated
obligation to maintain competition and prevent discrimination in
markets related to internet domain names by succumbing to
VeriSign’s strong arm tactic and allowing it to leverage its
limited-duration contractual control over .com and .net into a
permanent control over those registries and over adjacent markets
segments for various domain name services.”
The complaint, also filed on Monday in California, seeks to
prevent ICANN and VeriSign from signing the agreement. It requests
injunctions against VeriSign’s monopoly leveraging conduct;
requires ICANN to adhere to its government mandate to maintain
competition and prevent discrimination in the domain marketplace;
and hopes to force ICANN to entertain competing bids for the
operation of the .com registry
CFIT argues that if the agreement is signed it will erode the
internet community’s role in determining policy, and expand
VeriSign’s contractual control to the detriment of competitive
segments of the market.
“We are filing a preliminary complaint with the European
Commission detailing similar issues,” advised Markham. “It’s now up
to the courts to intervene and prevent ICANN and VeriSign from
eliminating competition in many markets related to internet domain
names”.
The reaction
ICANN regards the suits as an attempt to set the agenda for its
ongoing Vancouver meeting.
“It's unfortunate that we're responding to a lawsuit in the
middle of a conference instead of being able to engage actively in
discussions,'' ICANN’s general counsel, John Jeffrey, told the
Associated Press yesterday.
