.com Monopoly Faces Legal Challenge

A major antitrust battle is unfolding over control of the world’s most widely used internet domain. A California consumer has filed a federal class-action lawsuit against Verisign and ICANN, accusing them of maintaining an illegal monopoly over the .com domain registry and generating billions of dollars in allegedly excessive charges.

The lawsuit, filed in the U.S. District Court for the Central District of California, seeks to represent U.S. consumers and businesses that have registered or renewed .com domains. The allegations potentially carry broad implications because there are more than 160 million active .com registrations worldwide.

At the centre of the dispute is Verisign, which operates the registry infrastructure behind every .com domain. While registrars compete to sell domains to customers, every .com registration or renewal ultimately passes through Verisign’s registry and attracts its wholesale fee.

The lawsuit alleges that Verisign effectively controls 100% of the .com registry market, leaving registrars and domain owners without an alternative registry provider. This, plaintiffs argue, gives the company extraordinary pricing power over one of the internet’s most important digital assets.

A key focus is Verisign’s contractual “presumptive right of renewal.” According to the complaint, this provision allows Verisign to continue operating the .com registry indefinitely and effectively prevents competitors from bidding to operate it.

Plaintiffs further allege that Verisign secured and protected this position through years of pressure on ICANN, the nonprofit organisation responsible for coordinating the global domain-name system. ICANN is accused of enabling contractual arrangements that restrict meaningful competition.

Pricing is another central issue. Since 2021, Verisign’s wholesale .com price has reportedly increased by roughly 30% to $10.26 per domain, even as the lawsuit claims the underlying cost of providing registry services has declined across the industry.

Individually, a few additional dollars per domain may appear insignificant. At the scale of more than 160 million registrations, however, even modest annual increases can translate into hundreds of millions of dollars paid by businesses, entrepreneurs, nonprofits and individuals.

The plaintiffs are seeking damages for affected domain owners as well as an injunction intended to stop the alleged anticompetitive practices. Importantly, these remain allegations contained in the complaint and have not been established by a court.

The case raises a bigger question about the governance of critical internet infrastructure: Should one company retain indefinite control over .com, or should the registry be periodically opened to competitive bidding? The answer could reshape the economics of the global domain-name industry.