Out-Law News 2 min. read

ICANN beats VeriSign's antitrust claim


ICANN, the body responsible for the internet's domain naming system, has convinced a court to dismiss an antitrust lawsuit filed against it by domain registry VeriSign over its interference with the launch of VeriSign's Site Finder service.

In a ruling issued on Thursday, Judge A Howard Matz dismissed the main antitrust claim against the Internet Corporation for Assigned Names and Numbers (ICANN), and refused to consider the remaining contractual claims brought by VeriSign.

The dispute relates, at least in part, to VeriSign's surprise launch of the controversial Site Finder service in September 2003.

This new 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. The unilateral change was made, according to VeriSign, to improve "the user web-browsing experience."

But the alteration was heavily criticised. Network administrators accused VeriSign of seeking not to aid the misguided web user, but rather to generate more advertising revenue from its search engine partners. Others criticised the effect that the changes had on the working practices of the internet.

ICANN stepped in and, in the face of a threatened court action, VeriSign agreed to suspend the service.

But VeriSign was already smarting from a battle over its attempt to launch the equally controversial Wait Listing Service (WLS), which invites reservations for domain names that speculators hope to acquire upon expiry of their registration.

In February this year the Registry, impatient with delays and interference, sued ICANN, alleging that the body had overstepped its contractual authority and improperly attempted to regulate VeriSign's business in violation of its charter and its agreements with VeriSign.

The claims were dismissed by US federal court Judge Matz in May, but VeriSign was given time to strengthen its complaint. It is this amended complaint that has now been dismissed by the Court.

VeriSign attempted to argue that ICANN's structure – of advisory boards, a Board of Directors and a President – was such that the decision making process of ICANN was controlled by "economic competitors who have conspired to injure VeriSign". In effect, it feared that the advisory boards were the real decision makers.

Judge Matz rejected this.

"VeriSign's contentions are deficient," he wrote. "There is nothing inherently conspiratorial about a 'bottom-up' policy development process that considers or even solicits input from advisory groups." He added, "'Participation' is not enough to give rise to antitrust liability; control is required."

"The US federal court's decision serves as another important affirmation of ICANN's multi-stakeholder participatory model, and reaffirms the ICANN structure," said John Jeffrey, ICANN's General Counsel. "ICANN is not subject to capture by any commercial or other interest, including VeriSign."

The suit brought by VeriSign contained five other claims relating to the registry agreement between VeriSign and ICANN. The federal court did not consider these and VeriSign is likely to re-file the contractual claims with the California state courts.

According to eWeek, VeriSign's VP of government affairs, Tom Galvin, said, "While the venue will change, our objective to gain clarity regarding ICANN's appropriate role and the process for the introduction of new services does not." 

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