ICM Responds to Manwin's 2nd Amended Complaint

Rhett Pardon

LOS ANGELES — ICM Registry on Friday said Manwin's antitrust claim against the .XXX operator and ICANN should be dismissed because there are "glaring factual differences" between the case at hand and an appeals court ruling involving VeriSign.

Manwin attorneys, in its second-amended complaint filed last month, cited a 9th U.S. Circuit Court of Appeals  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.

But ICM Registry counsel, responding last week to a second-amended complaint, said that the VeriSign ruling cannot rescue Manwin's case and that it can make dispositive distinctions between the 2006 .com agreement and ICANN’s 2011 approval of .XXX.

"[Manwin] makes very clear that they have a single-pronged strategy for surviving defendants’ motions to dismiss: to try and convince the court that this lawsuit is a carbon-copy of another antitrust case involving ICANN and a TLD registry operator," ICM Registry wrote in a response to Manwin's second-amended complaint.

In the antitrust suit, Manwin alleges that ICM Registry received the original and renewal registry contracts without competition, is charging above-market .XXX prices, imposes other anticompetitive .XXX sales restrictions and has, because of its ICANN contract, precluded other adult-oriented top-level domains from operating.

ICM Registry counsel contend that ICANN approved the .XXX application through a process that Manwin admits was fully open to other applicants.

"[I]n sharp contrast to the facts in VeriSign, ICANN here rejected ICM’s applications several times before finally approving .XXX and, consistent with ICM’s status as a new entrant (as opposed to a dominant, incumbent operator like VeriSign), the ICM contract contains no provisions restricting ICM’s pricing."

In another attempt to blow up Manwin's charges of antitrust, ICM Registry attorneys said the amended complaint identifies no other registries which sought to operate a .XXX TLD, "and the only potential harm to consumers it asserts — without any supporting factual allegations — is the danger of higher prices or lower quality services for users of adult-content websites, not prospective purchasers of .XXX domain names.

"Having now had two opportunities to formulate its copycat VeriSign claim, [Manwin is] not entitled to a third," ICM Registry attorneys said.

Meanwhile, ICANN recently filed court papers to quash Manwin's attempt to exclude evidence because its rationale lacks merit.

"For example, they contend that the recitation in the articles of incorporation that  ICANN is a ‘non-profit charitable organization' is irrelevant, despite the fact that  they directly quoted this language in their complaint," ICANN attorneys said. "Of course, ICANN’s nonprofit status is relevant to plaintiffs’ claims because that status explains the very nature of ICANN and its activities with respect to the Internet’s domain name system."

ICANN said it is seeking the documents to be allowed by the court because they are central to Manwin's pricing allegations.

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."

 

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