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Appeals court reinstates antitrust case against VeriSignJun 05, 2009 (San Jose Mercury News - McClatchy-Tribune Information Services via COMTEX) -- A federal appeals court Friday reinstated a lawsuit against Mountain View-based VeriSign that alleges the company violated antitrust laws through its grip on the .com and .net domain name registration system. In a unanimous ruling, a three-judge panel of the 9th U.S. Circuit Court of Appeals concluded that an Internet industry trade group should be allowed to proceed to trial on claims that VeriSign has inflated the cost of domain names by engaging in predatory and monopolistic practices. The appeals court reversed an earlier ruling by San Jose U.S. District Judge Ronald Whyte, who dismissed the lawsuit brought in 2005 by the Coalition for ICANN Transparency. The lawsuit alleged that VeriSign in 2004 coerced a "sweetheart deal" from ICANN, which coordinates the Internet's domain name system, driving up the cost to register the popular .com and .net domain slots on the Web. The lawsuit alleges VeriSign secured the contract from ICANN without competitive bidding from other domain name providers that would offer the domain names for lower prices, including such major industry players as GoDaddy. "There are people out there who'd like the opportunity to bid on this," said Bret Fausett, lawyer for the coalition. VeriSign's lawyer could not reached for comment, but the company maintained in the appeal that the group had not made out a case for antitrust violations. A company spokeswoman said VeriSign does not comment on pending litigation. The antitrust lawsuit arises from a settlement between VeriSign and ICANN, which had been sparring over the domain name issue until reaching an agreement that gave the Mountain View company sole ownership of the .com and .net domain names through 2012. Among other things, the pact on the .com registry was not open to a bidding process and allowed VeriSign to increase the price for .com domain names by 7 percent over much of the contract period. There was competitive bidding for .net domain names, but the suit alleges VeriSign still obtained the contract through coercion. The trade group insists that other domain operators would charge half of what VeriSign charges for .com Web addresses if given the right to compete. The 9th Circuit agreed that the .com contract poses antitrust concerns that should be weighed at trial. The antitrust allegations over the .com registry, 9th Circuit Judge Mary Schroeder wrote, "are adequate to state a claim of actual injury to competition, in that potential competitors are allegedly unable to bid for operation of the .com registry, and that consumers are allegedly unable to benefit from the positive effects of that competition." Contact Howard Mintz at [email protected] or 408-286-0236 To see more of the San Jose Mercury News, or to subscribe to the newspaper, go to http://www.mercurynews.com. Copyright (c) 2009, San Jose Mercury News, Calif. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |