ICANN argued for antitrust exemption in 2012, misleads WSJ readers

Sept. 13, 2016, Fairfax, Va.—Americans for Limited Government President Rick Manning today issued the following statement in response to a letter to the editor in the Wall Street Journal Sept. 11 by Internet Corporation for Assigned Names and Numbers (ICANN) general counsel John Jeffrey where he claims “Icann isn’t and never has been exempted from antitrust laws… No ruling in Icann’s favor has ever cited an antitrust exemption as the rationale”:

“In 2012, ICANN argued explicitly in federal court that by virtue of their government contract with NTIA, they were not subject to antitrust liability. It’s right on their website. In 2013, the federal district court judge agreed that even if ICANN were a monopoly, antitrust would not apply because of its government contract. That’s called an exemption, an exception to the rule, however you want to define it. Yet somehow ICANN general counsel John Jeffrey in one of the great legal contortions of all time wants to pretend the government contract does not presently shield ICANN from antitrust when clearly it does. ICANN has argued that it does. Why is this controversial?

“The problem is that after the government lets the IANA functions contract lapse, exposing ICANN to this liability that heretofore was only ever been contemplated, as early as 1998 in the Clinton white paper, which Jeffrey ironically quotes.

“Jeffrey must think Congress is stupid as in his arrogance he ignores previously stated Congressional concerns about the antitrust liability facing ICANN post-contract. Making matters worse, the Obama administration apparently performed no antitrust analysis during the entire period of the transition beginning in 2014, with no responsive documents to our Freedom of Information Act request for all legal and policy analysis of antitrust concerns. NTIA even ignored a CCWG stress test of post transition problems in work stream 2 that contemplated a potential antitrust lawsuit as disrupting ICANN’s ability to govern the domain name system. This is one of the biggest dangers inherent in the Internet giveaway and NTIA, ICANN and the multistakeholders have barely paid it lip service.”


ICANN explicitly argued in federal district court that it “obtained the sole authority to delegate TLDs and select registries through ‘its agreements  with the U.S. government.’ …  Put simply, ICANN did not conduct its operations   to unlawfully acquire the authority to designate TLDs and select registries; thus, this authority does not support name.space’s monopoly claim because the Sherman Act does not punish firms whose monopoly position has been ‘thrust upon’ them.” https://www.icann.org/en/system/files/files/memo-support-icann-motion-to-dismiss-30nov12-en.pdf

The federal district court agreed that “ICANN’s power to control which TLDs will be accepted into the DNS and the entities that will act as registries for those TLDs was delegated to it by the United States Department of Commerce.  As a result, whatever monopoly power ICANN may possess was ‘thrust upon’ it as the result of ‘historic accident’ rather than the result of ‘willful acquisition.’… Because whatever monopoly power ICANN possesses was given to it by the United States Department of Commerce and not the result of the ‘willful acquisition’ of monopoly power, the Court concludes that no amendment could cure the deficiencies in Plaintiff’s monopolization claim brought pursuant to Section 2 of the Sherman Act.  That claim is therefore dismissed with prejudice.” https://www.icann.org/en/system/files/files/order-granting-icann-motion-to-dismiss-04mar13-en.pdf

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