The Ninth Circuit today reversed the district court's dismissal of antitrust claims against registry operator Verisign Inc., holding that the Coalition for ICANN Transparency had alleged viable causes of action for predatory pricing in the .com top-level domain and for attempted monopolization of the market for expiring domain names.
A key passage on the predatory pricing claim from the court's opinion:
CFIT has essentially alleged that ICANN is a private standards-setting body akin to the NFPA. ICANN administers the DNS and is responsible for entering into agreements with registry operators like VeriSign. According to the complaint, ICANN’s mission includes a commitment to promoting competition for the contracts. CFIT’s allegations further state that ICANN, like the NFPA, is a private body with no public accountability. These allegations are consistent with the view held by commentators on the subject, who have, indeed, identified Allied Tube as providing the strongest argument in favor of imposing antitrust liability on those who seek to coerce ICANN. See Michael Froomkin & Mark A. Lemley, ICANN and Antitrust, 1 U. Ill. L. Rev. 1, 72-73 (2003) (noting that “given ICANN’s private status, VeriSign will face antitrust liability for persuading a private company in a position of power to grant it control over a market,” and naming Allied Tube as the “closest analogue”). We hold, therefore, that pursuant to The Supreme Court’s holding in Allied Tube, CFIT has adequately alleged that VeriSign’s improper coercion of ICANN and attempts to control ICANN’s operations in its own favor violated Section 2.
The case is Coalition for ICANN Transparency v. VeriSign Inc., No. 07-16151 (9th Cir. June 5, 2009).
One likely venue of reaction to this decision is Discourse.net, a blog written by Prof. Michael Froomkin, whose work was quoted by the Ninth Circuit in the passage above.
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