A group calling itself the Coalition for ICANN Transparency, Inc. brought antitrust claims against Verisign, Inc., the sole entity licensed by ICANN to register .com and .net domain names. The district court dismissed the case, but the 9th Circuit reversed, holding that the complaint adequately stated antitrust claims. All parties agreed that as a practical matter, only one entity could handle registration of domain names. First, the court held that a provision requiring automatic renewal, unless Verisign breached the agreement, raised anticompetitive concerns because competitive bidding for future contracts was likely to be the sole opportunity for competition in this market. Second, the court held that provisions in the contract permitting certain fixed price increases were the product of an anticompetitive agreement. Third, the court held that Verisign allegedly predatory campaign to pressure ICANN to agree to the anticompetitive terms stated a Section 2 claim. Fourth, the court held that expiring domain names may constitute a separate market because they may have additional value compared with new names as a result of prior use and advertising. The plaintiff thus stated a valid Section 2 attempted monopolization claim with respect to Verisign’s efforts to secure the ability to administer registration of expiring names.
The court upheld the lower court’s dismissal of claims relating to the .net market on the ground that this contract was awarded through a competitive process and Verisign’s alledgedly predatory conduct related only to the .com market.