.XXX Antitrust Claims Similar to Verisign Case, Manwin Says

Jun 8, 2012 4:30 PM PST

LOS ANGELES — Manwin attorneys responded Friday to ICM Registry and ICANN's dual motions to dismiss the adult entertainment conglomerate's .XXX antitrust claims.

In its responses, Manwin continues claims that ICM Registry and ICANN colluded to suppress competition for the award of the top-level domain registry contract and to set above-market TLD prices. 

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."

ICM Registry, in response to an amended complaint last month, said that Manwin's claims are "nothing more than a transparent attempt to use the antitrust laws to eliminate a new Internet platform for adult content — .XXX — that plaintiff Manwin perceives as posing unwelcome competition to its dominant .com adult-entertainment empire."

ICM Registry recently submitted applications to ICANN for three new adult-oriented gTLDs: .sex, .porn and .adult. If awarded, ICM Registry could control the most prominent adult-oriented TLDs.

Manwin seeks orders in the suit that would enjoin the .XXX TLD as currently operated, void the ICM/ICANN agreements, require competitive bidding for a new .XXX registry agreement, or impose reasonable price constraints and service requirements on ICM.

ICM Registry and ICANN last month moved for orders 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).

Both of Manwin's responses to ICM Registry and ICANN in the first amended suit hone in on a 2010 9th U.S. Circuit Court of Appeals ruling — Coalition for ICANN Transparency vs. Verisign — and its argument that it has been or will be harmed economically.

Manwin attorneys cited the 9th Circuit antitrust ruling involving registrar Verisign, which held that the registrar violated the Sherman Act by colluding with ICANN to eliminate competition for the registry contract.

"[The] Verisign [case] is remarkably similar to this case," Manwin attorneys said. "[Manwin] expressly alleges what the Verisign [case] recognized as the classic such harm and injury, 'higher prices resulting from competitive restraints,' in particular the restraints from defendants’ agreements to eliminate competition for the .XXX."

Manwin attorneys also argue against ICM Registry's contention in its response to a first amended complaint that it worked unilaterally with ICANN in getting the registry contract set.

"That argument utterly ignores [Manwin's] detailed allegations of defendants’ agreements to award ICM the original and renewal registry contracts without competition; to  charge above market .XXX prices and impose other anticompetitive .XXX sales restrictions; and to preclude other adult-oriented TLDs," Manwin attorneys said.

Officials from ICM Registry did not respond for comment on Manwin's filings with the court on Friday.

Manwin in a statement Saturday said: "This important recent filing by Manwin in the U.S. District Court for the Central District of California maintains that ICANN and ICM conspired to eliminate competitive bidding along with all market restraints for XXX registry services, thereby dampening competition and causing injury to consumers."

The parties have asked the U.S. District Court in Los Angeles to schedule a hearing on the motion to dismiss by July 30.

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