Legal News

Added to the Antitrust Mix: A Suit Over Domain Names

By Ashby Jones

We’re just sayin’: 2009 could go down as the year antitrust and antitrust litigation made a bit of a comeback. The Obama administration has pledged tighter oversight on so-called single-firm activity; the DOJ’s looking in to hiring practices at technology firms, and the EU’s interest in the topic shows no sign of abating.

Add this to the mix: a suit accusing VeriSign Inc. — the Bay Area firm that holds the exclusive rights to the registry of dot-com domain names — for allegedly conspiring to set prices above market rates.

On Friday, the Ninth Circuit reinstated a suit accusing the company of colluding with ICANN, the government-backed nonprofit that oversees domain names, to fix prices and lock out competition. Plaintiffs include companies that buy registration rights from VeriSign and their customers that purchase dot-com names. Click here for the story, from the San Francisco Chronicle; here for the opinion.

Specifically, according to the Chron, the suit challenges VeriSign’s 2006 contract with ICANN. The six-year agreement, signed without competitive bidding, allowed the company to raise domain name prices by 7 percent a year in four of the six years. In a 3-0 ruling, the court said the plaintiffs may be able to prove that the pricing agreement and renewal provisions were illegally anti-competitive.

“VeriSign is extracting hundreds of millions of dollars a year in excess of what the market would bear for dot-com domain names,” said Bret Fausett, lawyer for the plaintiffs. “There are companies that would like to bid against VeriSign and would charge half of what VeriSign is charging.”

VeriSign, based in Mountain View, declined to comment. Laurence Hutt and James Blackburn of Arnold & Porter are representing VeriSign. Jones Day’s Jeffrey Le Vee and Sean Jaquez are representing ICANN.

Full post as published by Law Blog - WSJ.com on June 08, 2009 (boomark / email).