“There is a serious danger that ICM will establish and monopolize such a distinct market. As consumers seeking adult content become more aware of the .XXX TLD, registering and displaying websites in other generic TLDs may not easily be substituted for registration in the .XXX TLD.”

No that statement is not from the ICM Registry’s sales material.

That statement was contained in the lawsuits filed yesterday by Manwin and DigitalPlayground.com against ICM and ICANN alleging anti-trust violations involving the award of the .XXX TLD.

After reading through the 44 page lawsuit my first reaction was: I want to buy more .XXX domain names.

I think the case servers as cautionary tale to every major company in any industry to either apply to control the generic vertical of the new gTLD space or risk losing control of it to a competitor.

The Plaintiff’s have seemed to realize what those in the domain community already know.

The new gTLD program will allow someone to own exclusively the entire vertical of an industry, profession or business and they don’t have to share it.

The winning applicant of a .law, .health, .insurance or .music will control the entire space.

Yes a legal monopoly.

With the right to do what they want with the extension, including keeping it closed for their own use and benefit, or to sell domain name and price them in any manner they see fit, to reserve and sell premium domains in the extension for what the market will bear.

While some have pointed to the application fee of $185,000 as a bar to entry, it’s clear with the filing of the federal lawsuit yesterday as well as the request for administrative hearing, what Manwin and DigitalPlayground will spend to try to stop .XXX — costing many times more in legal fees than it would have cost to apply for a new TLD.

The independent Judicial Review that ICM won against ICANN reportedly cost each side Millions of dollars in legal fees and the out of pocket cost of the review was over $750,000.

More of the plaintiff’s allegation in the complaint recognize the unique position any new gTLD operator will enjoy:

  • “The ICM/ICANN contract leaves ICM with broad discretion to fashion and limit in a non-competitive, unreasonable manner the nature, quality and scope of .XXX registry services it offers registrars and registrants.”
  • “ICM has a complete monopoly in the market for the sale of .XXX TLD blocking or defensive registration services through registrars. No other company or entity can or does provide such services.”
  • “ICM currently has a complete monopoly in TLDs that have a name connoting adult content. There are currently no other TLDs beside .XXX with names that connote adult content.”
  • “No other company or entity besides ICM currently can or does provide, through registrars, affirmative registrations in TLDs that connote adult content.”

Is it legal?

Well Verisign has a Monopoly to operate the .com and .net registry.

Neustar has a monopoly over the .biz registry and Afflias has a monopoly over .Info and now ICM has the worldwide and exclusive right to operate .XXX.

What the plaintiffs call a monopoly are actually exclusive contracts entered into by ICANN which was granted its authority to manage the domain name system by the US government.

So the next time your chatting with a potential gTLD applicant the question you should ask them is does the company want to control the space to the right of the dot, in the entire vertical that best represents their industry, business, profession or product or are they fine with letting their competitor run it?

If you looking for a great sales tool for any potential new gTLD operator look no further than the lawsuit filed by Manwin.

Written by Michael Berkens, President of Worldwide Media, Inc. and Director of RightoftheDot.com

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