Category Archives: EU

Commission Paper 6: Respect for applicable law.

Of all the six papers, this one appears to be the most significant.

It says “ICANN’s role …. is a central issue for competition authorities such as the European CommissionI”.

You bet it is!

ThisPaper is an indication that the sleeping giant of DG Competition has finally woken up to the fact that rather than replace a single gTLD registry (Network Solutions as was) with liberalised market, the creation of ICANN has resulted in a structure which has many of the characteristics of a cartel.

There is absolutely no question about the Commission’s competence here.

As noted earlier, competition matters affecting the Single Market are an exclusive competence of the Union. In other words, the Union is the sovereign power here not the Member States.

The most fundamental thing about European law in the competition sphere is that it is right at the heart of the Union, stretching almost right back to its roots when six countries signed the Treaty of Rome.

And the fundamental point when considering any question of Single Market Competition enforcement is this :-

“Arrangements between undertakings” are illegal when they involve “prevention, restriction or distortion of competition within the common market”. (Article 81 ex 85 TEU)

As this is part of the Treaty, it is ‘directly applicable’ in the Member States. This means it IS already the law of all 27 countries who are part of the Union without their Parliaments needing pass additional legislation. It is a major, major, part of the acquis communitaire.

It makes intentional cartels are illegal. No surprise there. But unintentional “arrangements between undertakings” are illegal too. The effective word in the law is “or” not “and“.

Now, there’s no doubt that ICANN is at the heart of a number of ‘arrangements between undertakings’, particularly in the gTLD space.

Does any of them have the intention of distorting competition. Well, no. In fact as noted in the Paper ICANN’s constitution seems to require it to promote competition.

But do any of these ‘arrangements’ in ICANN have the effect of ‘prevention, restriction or distortion of competition’ in the Single Market?

The answer to this question is left as an exercise for the reader, but it seems that author of the paper seems to think that they very likely might do, and I would agree.

It would be interesting to see how European competition law can be integrated into a contract with no consideration between the US government and a California corporation!

I don’t think the USG would necessarily have the political will to defend such a move before Congressional or Senatorial interest where there may still be a residual view of ‘why are people outside the US trying to tell us how to run our Internet?’.

But that’s not necessary.

gTLDs by definition are designed to be operated in all 27 Member States. And therefore the EU can take any enforcement action it wishes to, if it feels ICANN is in breach of competition law.

It’s particularly handy that ICANN’s Brussels office is right next door to the Commission.

Really handy, and not far to walk when they decide to launch a raid, like they did to the mobile phone companies

Ancient Chinese curse: May you live in interesting times!

Commission Paper 5: Finance and Staff

There’s actually not much to comment on here, apart from to note that Finance and Staff matters have been causing concern in the ICANN Community, including from senior members of it and therefore the Commission is right to question matters. (One need only look at Lesley Cowley’s quizzing of soon to be ex-CEO Beckstrom to realise there is a bit of piscine odour about the staff situation!)

Developments in this area should be watched carefully.

Commission Paper 4: Corporate Governance

The Commission’s paper on Corporate Governance is densely packed.

It’s certainly true that it sometimes seems that the compostion of the ICANN board sometimes seem  a bit like choosing poachers for a committee to decide on the rules for gamekeepers.

So it seems there’s some significant merit in requiring ICANN to address the Commission’s concerns in Paper 4.

And whilst I have the highest of respect for former ICANN Chairman, Peter Dengate-Thrush, a tireless and indefatigable player in the ICANN drama since its early days, for him to take up a highly-paid Board position with a company that stands to benefit dramatically from ICANN’s new gTLD program is unfortunate to say the least.

When UK civil servants join private industry, there is a period of purdah. Something similar should be considered by those responsible for ICANN’s corporate ethics.

Oh, and by the way, can anyone tell me who that is?