Not many know that only one company located within the United States controls the registries of all .com and .net domain names in the world. That company is VeriSign, Inc., a Delaware corporation located in Silicon Valley. VeriSign, through its contractual relationship with Internet Corporation of Assigned Names and Numbers (ICANN), has been the sole operator of all .com and .net registries since 2001. Neither the contract to control the .net registry, nor the contract to control the .com registry, was the result of a competitive bidding process. This VeriSign monopoly may end if an antitrust suit now pending in the Northern District of California federal court is successful.
Enter the “Coalition for ICANN Transparency” (CFIT). CFIT is purported to be a group of website owners and others involved in the domain name system. On November 28, 2005, CFIT filed the first of several complaints against ICANN and VeriSign in the Northern District of California. Each complaint alleges violation of antitrust laws to end VeriSign’s monopolistic control of the .net and .com registries. ICANN was eventually dropped from the case in December 2006, when it was not included as a defendant in a second amended complaint filed by CFIT. Although the District Court dismissed the action against VeriSign in May 2007, the story doesn’t end.
CFIT appealed the dismissal to the Court of Appeals for the Ninth District and on July 9, 2010 it reversed the lower Court’s ruling and allowed the case to go forward against VeriSign. It remains to be seen what will happen next. The CFIT action has certainly turned a spotlight on the practices of both VeriSign and ICANN. Last year, for instance, the House Subcommittee on Communications, Technology and the Internet held hearings on ICANN’s contracts with VeriSign.
If the CFIT case goes to trial and VeriSign loses, the results could be dramatic. Plaintiff CFIT has asked the Court to ultimately declare the 2006 .com Registry Agreement unlawful, as well as those provisions of the 2005 .net agreement regarding control of a registry of expiring domain names. Additionally, if it is determined that VeriSign has violated antitrust laws, there is the potential for treble damages, as well as payment of CFIT’s court costs and attorneys’ fees. Neither side in this matter appears to be ready to fold, so it will be interesting to see what happens next. Stay tuned.
— Deborah A. Logan, Esq.