Manwin Licensing International, an information technology company specializing in highly trafficked websites and online adult entertainment, has filed a lawsuit against the Internet Corporation for Assigned Names and Numbers (ICANN) and ICM Registry (ICM) for antitrust violations. ICM is the sole operator of the .XXX registry, and was selected and approved for that position by ICANN, which must approve the operators of all Top Level Domain names.
“It uncovers a pernicious monopoly at the very heart of the Internet. Ending anticompetitive practices by ICM and ICANN will not only protect our business, but help other companies compelled to pay a fee to keep their names unassociated with a .XXX designation.”
In the lawsuit, filed in the United States District Court for the Central District of California, the plaintiffs maintain that ICANN and ICM conspired to eliminate competitive bidding and any market restraints for certain .XXX registry services, with the intent to injure competition and consumers.
According to the complaint, the creation of the .XXX TLD, forces owners of trademarks and domain names in other Top Level Domains (TLDs), such as ‘.com’, to purchase expensive “defensive registrations” from ICM to prevent cyber-squatters or others from exploiting those names in .XXX. Through above-market (and otherwise unnecessary) charges for such defensive registrations and other sales activities, .XXX expects to earn $200 million in annual profits.
Manwin also states more broadly that the anti-competitive practices of ICM and ICANN harm consumers because businesses are in general forced to pay higher than competitive prices for .XXX registry services or receive lower-quality registry services than would exist in a competitive market. For example, ICM is charging $60 annually for each .XXX registration, which is ten times the fee for other comparable TLDs.
Manwin owns and licenses one of the largest portfolios of premium adult-oriented website domain names and trademarks. Domain names and trademarks owned by Manwin include YouPorn.com, Pornhub.com, xTube.com, Brazzers.com, and other popular adult entertainment websites. The company also operates and manages all “Playboy” online content and runs Playboy Television worldwide, using the “Playboy Plus Entertainment” label.
“This is a monumental case impacting the entire business community and the Internet ecosystem,” said Fabian Thylmann [pictured], managing partner of Manwin.
“It uncovers a pernicious monopoly at the very heart of the Internet. Ending anticompetitive practices by ICM and ICANN will not only protect our business, but help other companies compelled to pay a fee to keep their names unassociated with a .XXX designation.”
In addition, the complaint states that there are significant costs and disadvantages of defensive registrations, and their injurious effect overshadows any alleged benefit of the .XXX TLD.