Kremen Files Antitrust Suit Against ARIN

Michael Hayes
SAN FRANCISCO — The latest chapter in the Sex.com saga has a new character — the American Registry for Internet Numbers (ARIN). Gary Kremen, the former owner of the domain, has filed suit in federal court against ARIN alleging, among other complaints, violations of U.S. antitrust laws.

What began as an effort to enforce Judge James Ware’s 2001 order returning the hijacked block of IP addresses to Kremen, quickly met resistance from ARIN, a regional Internet registry that allocates blocks of IP addresses in North America.

When Karl Kronenberger, attorney for Kremen, contacted ARIN in November 2001, he encountered what he called “opposition and secrecy.” According to court papers, “resistance to comply [with the order] continued back-and-forth… between ARIN, its counsel and plaintiff Kremen into 2005.”

According to court papers, Kremen’s demands that the property be transferred were refused by ARIN because Kremen would not “enter into a mandatory side agreement with ARIN, wherein Kremen would effectively relinquish all of his property rights in the netblocks.”

The court filings refer to the IP address blocks as netblocks.

“We didn’t understand what kind of organization didn’t follow a federal court order,” Kronenberger told XBIZ. “They [ARIN] just would not budge, and they would not explain their choice [not to comply]. That left us with no other choice.”

On April 12, Kronenberger filed suit against ARIN, alleging in the complaint that the company acts as a “biased gatekeeper for the allocation of the primary resource required to compete.”

That primary resource being an IP address.

While the suit seeks compensatory damages of $15 million and punitive damages of $45 million, the maximum allowed under the antitrust statute, Kremen and Kronenberger are more concerned with changing the way ARIN operates.

“ARIN hands out IP addresses in a kind of contract of adhesion,” Kronenberger said. “That means that in addition to the applicant having to give extensive details about how they intend to use the block of addresses, ARIN can take the block away without any justification. The idea that ARIN can simply take back those blocks is not a popular one in the Internet community, and it is contrary to the best interests of commerce, particularly to small businesses.”

Boston-based Escom LLC recently purchased the highly coveted Sex.com domain for $14 million.