ICANN responds to Namecheap’s lawsuit over .org domain pricing

Organization says it has gone above and beyond what an arbitration panel required it to do.

ICANN has filed a notice of demurrer in a lawsuit brought by domain name registrar Namecheap.

Namecheap filed a complaint under the Independent Review Process (IRP) in 2020 to protest ICANN’s unilateral decision to remove price caps on .org and .info domain names.

The IRP panel found that ICANN did indeed violate its articles and bylaws. But ICANN claimed the IRP panel’s ruling provided merely recommendations, not requirements, for what the board should do.

ICANN’s board asked its Board Accountability Mechanisms Committee (BAMC) to review the decision. In June 2023, the board agreed with the BAMC’s recommendation that hiring an economist to study the issue would be a good first step.

In its suit (pdf), Namecheap alleged nothing had happened since then. It asked for an injunction against ICANN.

ICANN has responded with a notice of demurrer.

It states (pdf) that Namecheap is trying to turn the IRP’s recommendations into requirements through the lawsuit:

In its award (“Final Declaration”), the arbitration panel (“Panel”) was explicit that there is a distinction between what the Panel may “declare” and what the Panel “can only ‘recommend’.” (Compl., Exhibit A ¶ 472.) Plaintiff ignores this distinction and the Panel’s express statements on this point, instead filing this lawsuit in an attempt to require ICANN to adhere to the Panel’s non-binding recommendations. ICANN has acknowledged the Panel’s actual declarations, which is the limit of what this Court could order ICANN to do—leaving no other relief Plaintiff could obtain, and causing Plaintiff’s cause of action to fail as a matter of law. [Emphasis in original]

According to ICANN, the organization acknowledged the IRP’s decision:

The ICANN Board has already considered the Final Declaration and passed a formal Board Resolution acknowledging the IRP Panel’s declarations that: “(i) Namecheap prevailed on certain of its claims in the Namecheap, Inc. v. ICANN Independent Review Process; (ii) ICANN violated its Articles of Incorporation and/or Bylaws in the manner set forth in the Final Declaration; and (iii) ICANN shall reimburse Namecheap the sum of US$58,750.” (RJN, Exhibit A.) The Board also directed ICANN to “take all steps necessary to reimburse Namecheap in the amount of US$58,750,” and said payment was issued to Namecheap in early 2023. (RJN, Exhibit A.) Thus, ICANN has complied with the declarations of the IRP Panel’s award, and there are no further remedies this Court could order.

ICANN says that even though it didn’t have to follow the panel’s recommendations, it decided to retain an economist as recommended to provide an economic report about pricing power in .org and .info.

Indeed, after Namecheap filed its lawsuit, ICANN published a consultant’s flawed economic analysis that stated that .org and .info don’t have pricing power.