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Manwin Files 1st Amended Complaint Over .XXX

Manwin Files 1st Amended Complaint Over .XXX
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Feb 21, 2012 3:00 PM PST    Text size: 

LOS ANGELES — Manwin attorneys dropped two of four alleged violations in its antitrust suit against .XXX operator ICM Registry and ICANN, according to the adult entertainment giant's first amended complaint filed today.

The two dropped counts were allegations over violations to a pair of California statutes relative to unfair competition and practices. Still standing, however, are two claims alleging ICM Registry and ICANN violated Sections 1 and 2 of the Sherman Antitrust Act.

The amended complaint, filed this morning at U.S. District Court in Los Angeles, elaborated further on ICM Registry's .XXX deal with ICANN, with Manwin alleging that the two defendants have created "perpetual monopolistic control of the relevant markets" and that because of that control it "will preclude the entry of new competitors who would offer better quality and/or lower priced registration services for .XXX or other adult-oriented TLDs."

"ICANN and ICM both knew and intended, at the time they  entered the contract, that the contract would permit and be used by ICM to charge supra-competitive prices, prevent future entrants into the market for adult-oriented TLDs, and lead to poorer quality services and less innovation than would result if ICM had to compete for the .XXX registry or with other adult-oriented TLDs," the first amended complaint said. "In fact, during contract negotiations, ICM informed ICANN of the above-market  prices 1CM intended to charge and from which ICANN would profit."

In the amended complaint, Manwin also charged that ICANN agreed to a .XXX contract with ICM Registry, "not only in response to those improper and coercive tactics but also  because ICM promised to pay ICANN what is expected to be millions of dollars in  annual fees derived from ICM's sales of .XXX registrations, and in particular  defensive registrations."

The need for defensive registrations in .XXX is also heightened by another factor, Manwin attorneys allege.

"ICM agreed in its registry contract with ICM that .XXX would be an industry-limited and sponsored TLD. Under the contract, only those providing  adult entertainment services are supposed to operate .XXX web sites. But ICM has not enforced this restriction. Instead, ICM has allowed .XXX registrations by those having nothing to do with adult entertainment.

Manwin counsel said that scores of non-adult websites are currently found on the .XXX TLD, including the .XXX domains OnlineClasses.xxx (online universities), MusicVideos.xxx (embedded YouTube music videos), DiscoverMe.xxx (advertising for musicians, artists, comedians and models for hire), EFlowers.xxx (florist), RentACar.xxx (car rental services) and  InsuranceRates.xxx  (various lines of insurance), among others.

"Permitting broad, unregulated access to .XXX enhances the likelihood that others  will register .XXX sites infringing rights of name holders," Manwin lawyers said. "ICM's breach of its  contractual obligations thus makes defensive .XXX registrations more necessary."

ICM and ICANN have until April 17 to file a response to Manwin's amended complaint.

Manwin and co-plaintiff Digital Playground filed the antitrust suit waged just prior to .XXX's general roll out in November. In January, Manwin acquired Digital Playground.

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