Competitive Advantage vs. Anti-Competitive and the closed TLD debate
Thursday, March 7th, 2013
There’s a big difference between gaining competitive advantage and being anti-competitive.
This morning I read Technology Policy Institute’s opinion on “closed” top level domains.
A closed domain is one in which the applicant doesn’t plan to offer second level domain names to the public, including its competitors.
My belief about closed generics is quite similar to TPI’s.
This paragraph sums up much of my view:
Several commentators have expressed concern that closed gTLDs are anticompetitive. No evidence supports this claim. First, we already have experience with generic second-level domain names — e.g., cars.com — which have provided useful services with no apparent anticompetitive effect. There is no reason to expect anything different from a .cars gTLD. If, for example, General Motors (or any other automobile company) were to operate .cars, it is not plausible to suggest it could thereby gain market power in the market for cars. Note also that both operators and ICANN are subject to the U.S. antitrust laws if they use the TLD system in an anticompetitive way. To the extent that ICANN allows synonyms as gTLDS — e.g., “autos” “automobiles”, “motorvehicles”, perhaps even “goodcars”, etc. — the potential competitive problems become even more remote.
I think that many opponents to closed TLDs are confusing competitive advantage with being anti-competitive.
There’s a big difference.
Would owning .cloud give Amazon.com a competitive advantage in the cloud business? It certainly won’t hurt. But would it be anti-competitive, making it difficult for others to compete in the business? Of course not.
Similarly, Barnes and Noble gains some competitive advantage from owning book.com. But owning that domain clearly isn’t anti-competitive.
Comments like this miss the point. The debate here isn’t (or shouldn’t be) about some legalistic determination about “market power” and what constitutes “anti-competitive” in that light.
The new gTLD program was designed to improve competition and consumer choice. Its success will be measured against those criteria.
“Closed” gTLDs may not necessarily be “anticompetitive” in the way an antitrust attorney or economist would understand it, but it’s hard to make a case that they will improve competition and consumer choice.
But do you think that we are all suckers?
“The openness of the net has allowed so many other people to contribute that it’s sort of like creating a giant tidal wave, we’ve been surfing (no pun intended) on that tidal wave for 30 to 40 years.”
recent comments by Vint Cerf
Closed TLDs will bring a different sort of tidal wave, one where contribution is shaped not by freedom of expression but by very large companies
If there is to be innovation in new TLDs, we have to consider multiple business models.
Setting up a new book tld to compete with .book would appear to be a rather more difficult task than setting up a new bookstore to compete with book.com. The role of the string as a signifier is more important at the top level.
Undercut book.com by a few cents and I might be able to sell someone a book.
But while .book can offer services to its registrants, who is going to want a .mybookstore website or email address?