ICANN Says It Can't Be Subject to Antitrust in .XXX Suit

May 14, 2012 4:00 PM PST

LOS ANGELES — ICANN doesn't run porn sites and doesn't sell or register domain names, and that's why it says it should be dismissed from Manwin's antitrust suit against ICM Registry and the Internet governing body.

"In fact, ICANN does not make or sell anything, it does not participate in any market, and its bylaws expressly forbid it from participating in any of the 'markets' referenced in [Manwin's first amended complaint]. Yet ICANN somehow finds itself as a named defendant in an antitrust case, accused of restraining trade," ICANN said in a response to the amended complaint.

Attorneys for ICANN said in their response to Manwin's first amended complaint, which followed ICM Registry's, that the decision to allow the creation of a new TLD such as.XXX is not an action that could result in a finding that ICANN has restrained trade or conspired to monopolize a market.

Manwin's complaint, they said, is "a garden-variety business dispute that does not appear to implicate the antitrust laws" and that ICANN doesn't, and cannot under its bylaws, participate in any of the markets that may exist that involve the domain name system, TLD registries or registrars.

"From the moment ICANN was formed to this day, one of ICANN’s core values has been to create competition within the Internet’s DNS," ICANN attorneys said. "The creation of competition cannot give rise to an antitrust complaint, which dooms plaintiffs’ attack on ICANN’s decision to help create that competition."

What Manwin is complaining of in the suit, ICANN counsel said, is potential competition the Luxembourg company may face from the operation of .XXX websites.

"An increase in competition cannot violate the antitrust laws, but even if the way ICM has decided to operate the new .XXX registry could somehow raise legitimate antitrust concerns, that does not and cannot create antitrust exposure for ICANN."

ICANN attorneys, calling the suit over violating antitrust laws "absurd," have asked for a judge to approve a motion to dismiss.

ICM Registry already has moved for an order dismissing claims under §§ 1 and 2 of the Sherman Act on grounds that Manwin failed to plead antitrust injury, failed in allegations that ICM Registry and ICANN conspired to create anticompetitive restraint or to monopolize a relevant market and that Manwin hasn't alleged that ICM Registry engaged in unilateral anticompetitive or exclusionary conduct — all legal standards for antitrust cases to survive motions for dismissal pursuant to federal Rule 12(b)(6).

Manwin and its newly acquired Digital Playground unit teamed up in November just prior to .XXX's general roll out to seek "redress for monopolistic conduct, price gouging and anticompetitive and unfair practices, broadly harming competition, businesses and consumers, and arising out of the establishment of .XXX."

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