The .XXX TLD Gets First Major Lawsuit

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Major porn companies have banded together to sue ICANN over the new adult top level domain (TLD) .XXX.  The suit is an anti-monopoly claim against the non-profit that oversees most of the well-known TLDs (com, net, org, etc).

The major companies behind the suit are Luxemburg-based Manwin and Digital Playground, which together own many of the Web’s most well-known porn hubs.  They contend that ICANN is price gouging on the .XXX domain and want an injunction to stop the TLD and require its re-opening with competition and “reasonable price constraints.”

The lawsuit was filed in the U.S. District Court of California on November 16 and accuses ICANN and its registry company ICM Registry of engaging in “monopolistic conduct, price gouging, and anti-competitive and unfair practices.”

This might seem frivolous, except that it’s very serious and could have long-lasting implications on the domain system as we know it.  The crux of the suit alleges that ICM (a for profit contracted by ICANN) used coercive tactics and promises of millions of dollars in fees if it were made the sole registrar of .XXX.

If Manwin and Digital Playground were to win this suit, it would fundamentally change a lot of how we use and interact with domain registrations and use.  Currently, there are a handful of TLD registrars in the world, each more or less operating regionally.  They pay ICANN a small fee for every domain registered through them and ICANN acts as the world’s “central hub” for domain registries.

When ICANN approved the dot XXX TLD earlier this year, a lot of buzz around its implementation was heard.  Early registrations were opened with companies paying many thousands of dollars in fees to secure their brands on the domain.  Including many who traditionally would not be associated with porn: like colleges and universities.

At $300 per registration, that’s not insignificant, considering that most have many names and variants to protect.  CraigAgranoff.xxx is one thing, but Craig-Agranoff.xxx, CraigAg.xxx, AgranoffCraig.xxx, Agranoff-Craig.xxx, and then several each for all of my owned properties (brands) could potentially ad up to tens of thousands in fees.  A university, for instance, might have their own name (and 3-4 variants), thier football team, their basketball team, their volleyball teams, their sports teams collectively, their various departments, and even famous backers or names of buildings on campus.

Securing these means securing your brand.  Not doing so could mean costly lawsuits later (either to fight misuse of it or to fight potential litigation for your not protecting someone from it).  Most businesses and apparently universities have opted to pay now instead of later.

But for the adult industry, that was not as clear cut.  ICM did not allow some of the domains to be sold in this relatively open pre-market, instead reserving them to auction to the highest bidder.  Despite the fact that the .com/net/etc equivalents may be clear brands owned by others.

These auctions are quite lucrative.  “Gay.XXX” auctioned for $500,000 and many others are going for $200,000 and up.

Another blow to ICM is their requirement that legal rights and claims against them be waived as a condition of registering with them.  This doesn’t look good for them in court.

ICANN should take this lawsuit seriously.  Not only does it have potential to change how domain registrations are made, but it could have long term ramifications for how new TLDs are introduced and the way that they’re handled.


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