August 27, 2004 9:51 AM PDT
VeriSign's antitrust suit against ICANN dismissed
A federal district court judge on Thursday threw out VeriSign's legal arguments that ICANN's ban on this tactic amounted to a violation of U.S. antitrust law.
VeriSign, which runs the master database for .com and .net addresses, had argued that its competitors had succeeded in stymieing VeriSign's plans for its Site Finder service by providing advice to the board of directors of ICANN, or the Internet Corporation for Assigned Names and Numbers.
That does not compute, according to Judge A. Howard Matz of the Central District Court of California.
"VeriSign's contentions are deficient," Matz stated in a 16-page opinion. "There is nothing inherently conspiratorial about a 'bottom-up' policy development process that considers or even solicits input from advisory groups."
The court's ruling is the latest blow to VeriSign's attempts to gain support for its plan to parlay its government-granted monopoly over the administration of the databases for the .com and .net domains into better profits.
"What this means is the case will be heard in a California state court," said Tom Galvin, vice president of VeriSign's government relations group. "And while the venue will change, our objective to gain clarity regarding ICANN's appropriate role and the process for the introduction of new services does not."
Last September, VeriSign--through the new Site Finder program--temporarily redirected domain lookups for misspelled or nonexistent names to its own site. The practice confused some Internet e-mail utilities and drew angry denunciations from frustrated network administrators. Critics charged that the Mountain View, Calif.-based company was trying to make money off Internet users' typos through advertising on the Site Finder site.
VeriSign has defended Site Finder by saying it offers a better way to handle misspelled or nonexistent domain names than the unhelpful error messages that some Web browsers currently provide. Most problems it caused were "minor or inconvenient," VeriSign said in a presentation to the ICANN committee.
A long-awaited report on the service, prepared by a group of technical experts organized by ICANN and released last month, concludes that Site Finder had undesirable side effects, violated commonly accepted codes of Internet conduct and should remain offline.
The 85-page report says that while Site Finder did not have catastrophic effects on the Internet, it nevertheless ran afoul of "community standards and caused harm to individual users and enterprises."
This is the sort of advice to the ICANN board of directors that VeriSign alleges came from competitors and resulted in its service being shut down. The federal court dismissed the company's charges and said it was likely that VeriSign would have to prove a board-level conspiracy to be successful in an antitrust case.
"VeriSign has not alleged, and cannot allege, that the co-conspirators compromised a majority of the ICANN board of directors," the court stated. "It cannot allege that the 'supporting organizations' within ICANN's structure that do include competitors of VeriSign dominated the board."
After the antitrust lynchpin fell, the federal judge dismissed six other complaints leveled by VeriSign. It's still possible for VeriSign to refile the case in state court.
CNET News.com's Declan McCullagh contributed to this report.
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