The court of appeals reversed a judgment and remanded the action for further proceedings. The court held that a corporation composed of internet domain name registrars and owners stated a Sherman Act Section 1 claim by alleging anticompetitive contract renewal and pricing terms in a private company’s agreement to operate the .com domain name registry. The court held further that for purposes of the corporation’s Section 2 Sherman Act claim there existed a separate market for expiring domain names as opposed to domain names never before registered.
In 2005, VeriSign, Inc., prevailed in a competitive bidding process for operation of the .com and .net internet domain registry system. As a result, VeriSign entered into agreements with the Internet Corporation for Assigned Names and Numbers (ICANN), the nonprofit corporation that administers the domain name system on behalf of the United States Department of Commerce. Under a 2005 .net Agreement and a 2006 .com Agreement, VeriSign was authorized to charge $6 for .com domain name registrations, with certain percentage increases authorized in ensuing years, and $4.25 for .net domain name registrations, with no cap on future price increases.
