U.S. government makes Civil Investigative Demand about .web.
The long-running fight for the .web top level domain name has taken another turn as the Antitrust Division of the U.S. Department of Justice has opened an investigation.
Verisign CEO James Bidzos revealed the investigation on the company’s regularly scheduled earnings call today.
Bidzos said the company received a Civil Investigative Demand (CID) on January 18. He said this is similar to receiving a subpoena. The CID requested information about VeriSign’s potential operations of the .web TLD.
While he would not disclose much more information about the request, the antitrust question is interesting.
On the one hand, I’m not sure .web will be a true challenge to pre-2012 top level domain names given the lackluster uptake of new TLDs.
On the other hand, Verisign certainly saw .web as either a huge opportunity or a threat to its existing business. Otherwise, it wouldn’t have jumped through hoops to obtain the top level domain name.
Verisign paid $135 million to acquire the domain name. It wasn’t an applicant for the domain name but struck a deal with one of the other applicants.
The deal has drawn the ire of competing applicants. One is upset that it didn’t make money from a private auction in which the losers take the proceeds and the other is upset that it didn’t win the domain name.
Based on Verisign’s disclosure, it seems the CID has to do with potential antitrust issues with Verisign operating .web rather than how the top level domain was awarded.
On this general subject (I know very general) it did cross my mind the other day “how is the Donald Trump Presidency going to affect dot Com domains as far as those outside USA are concerned” ?. I just wonder whether some Countries will take umbrage at him and stop using dot com ? I sure hope not .
@JohnUK,
Of all the places anti-Trump or anti-American sentiment could focus, I don’t think .COM is likely to be the grasshopper under the magnifying glass. If someone wants to torch insects, they can find plenty of easier, more symbolic targets. Naturally I’m not advocating this, but in a worst-case scenario …
Trump’s own brand is much more visible on the sides of hotels and resort buildings. Ditto the “Trump” clothing lines being pushed by the white house on behalf of the Trump women. Plus, there are plenty of unrelated American commercial brands that would be easy for foreigners to boycott – ranging from Starbucks and Apple to Nike and Ford. Innocent as they are, those brands are much more visible symbols of America across the world than .COM.
.COM is used internationally, and “international” (rather than American) really is what it means outside the USA. So I think .COM is an unlikely target for anti-Trump / anti-American protest.
But even if .COM were seen as somehow compromised by association with Trump – which I think is pretty far-fetched – how would people “stop using .COM” in practice? Switching to the local country code is no answer – not for any website with an international audience. Most of the nTLD substitutes are linguistically limiting. And, in any case, they’re run by American companies too. .NET? American. .ORG? American. .XYZ or .WEB or .WHATEVER? American.
A mass movement of people switching to a new domain name just to distance themselves from Trump’s America? That’s unlikely to happen. As domain sellers, we all know how reluctant established website owners are to consider ANY rebrand of their site.
Antitrust issues will most likely will blow over fast. Their competitors run way more TLDs then them and do ridiculous pricing models compared to Verisign . Stock is slightly up today.
http://www.ftc.gov
Anti-competitive Practices
The FTC takes action to stop and prevent unfair business practices that are likely to reduce competition and lead to higher prices, reduced quality or levels of service, or less innovation. Anti-competitive practices include activities like price fixing, group boycotts, and exclusionary exclusive dealing contracts or trade association rules, and are generally grouped into two types:
agreements between competitors, also referred to as horizontal conduct
monopolization, also referred to as single firm conduct
The FTC generally pursues anti-competitive conduct as violations of Section 5 of the Federal Trade Commission Act, which bans “unfair methods of competition” and “unfair or deceptive acts or practices.”
Horizontal Conduct
It is illegal for businesses to act together in ways that can limit competition, lead to higher prices, or hinder other businesses from entering the market. The FTC challenges unreasonable horizontal restraints of trade. Such agreements may be considered unreasonable when competitors interact to such a degree that they are no longer acting independently, or when collaborating gives competitors the ability to wield market power together. Certain acts are considered so harmful to competition that they are almost always illegal. These include arrangements to fix prices, divide markets, or rig bids.
Single Firm Conduct
It is unlawful for a company to monopolize or attempt to monopolize trade, meaning a firm with market power cannot act to maintain or acquire a dominant position by excluding competitors or preventing new entry. It is important to note that it is not illegal for a company to have a monopoly, to charge “high prices,” or to try to achieve a monopoly position by aggressive methods. A company violates the law only if it tries to maintain or acquire a monopoly through unreasonable methods.
The new anti-trust issue could lead to horizontal conduct as well as single firm conduct. Could turn out to be good for the entire industry and not just a few.
Happy Hunting
Hello Andrew,
U.S. Anti-trust should focus on S.E.M. Platform, Not foolish waste of time they are wasting now. The S.E.M. Platforms Destructive Disruption of Online Business Expansion, remains the biggest threat to ALL Business Expansion. If our legislators get this truth right, our countries National Security is assured. More importantly they have to pony up the resolve to actually move on this critical National Security Issue. JAS 3/3/17
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) Former ( Rockefeller I.B.E.C. Marketing Analyst/Strategist) (Licensed C.B.O.E. Commodity Hedge Strategist) (UseBiz.com)