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 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.
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.
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”.
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.
