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Amazon.com logo on a monitor, file 2012. REUTERS Leonhard Foeger

Amazon's play for Web names could test antitrust law

3/13/2013 COMMENTS (0)

By Andrew Longstreth 

(Reuters) - Amazon.com Inc may be setting the stage for a court battle and a test of antitrust law if it is allowed to go ahead with its plans to buy control of new Web address suffixes such as .book and .author.

Publishers and authors have voiced concerns over plans by the Internet Corporation for Assigned Names and Numbers to sell control of book-industry-related domains, citing worries about potential market abuses.

Scott Turow, lawyer, novelist and president of the Authors Guild, wrote in a letter to ICANN that "(p)lacing such generic domains in private hands is plainly anticompetitive, allowing already dominant, well-capitalized companies to expand and entrench their market power. The potential for abuse seems limitless."

Interviewed by Reuters on Tuesday, Turow, a partner at SNR Denton, had no comment on a potential legal challenge.

But he voiced concern that .author would assume greater relevance to the public than .com in searches for an author's website.

"It seems to make more sense to go to scottturow.author (than to scottturow.com)," Turow said. "It's troubling to me that I'm going to have to ask Amazon and pay them a fee."

Over the last seven years, ICANN has embarked on a process of introducing more domain names to try to bolster competition in that space. Last year it attracted 1,930 applications. Applicants have to pass a rigorous process, and are expected to start receiving their names this year.

Amazon has made applications for several dozen domain names, according to ICANN's website, including .book and .author. Legal experts suggest that authors and publishers could be among potential plaintiffs who may bring an antitrust claim against Amazon and ICANN over the sale of certain book-related domain names. Other potential plaintiffs could also include Amazon's competitors, states or the federal government.

One potential claim could be made under Section 7 of the Clayton Act, which bars the acquisition of assets that could substantially lessen competition or create a monopoly.

CONSUMER PREFERENCE?

A key to making a Clayton Act claim challenging Amazon's deals, according to Maurice Stucke, a professor at the University of Tennessee College of Law, may be whether consumers looking for books will prefer websites ending in .book over .com.

If there is an expectation that .book will become the preferred website ending for books, plaintiffs could allege that the deal allows Amazon to extend or maintain its monopoly power in online book retailing longer than it would be able to do without the transaction. The claim could force a court to weigh the market potential for untested domain names such as .book or .read.

"We don't know what consumer behavior will be in the future - how they'll react to having multiple registry names," Stucke said.

Amazon already has addressed some concerns voiced over its proposed acquisitions. Stacey King, senior corporate counsel with Amazon, argued in a letter to ICANN that expanding alternatives to .com would benefit consumers. She also said that historically generic terms used for domain names have not led to competition issues.

"Why should a company be able to own 'widget.com' and not '.widget?" King wrote. "Currently, .com may be considered more 'valuable' space, but that does not create a competition issue for the owner of the generic second level domain."

An Amazon spokesman said the company had no additional comment.

Allen Grunes, a partner at Brownstein Hyatt Farber Schreck specializing in antitrust law, acknowledges that if plaintiffs pursued a case against ICANN, it would have strong counter-arguments.

"ICANN is going to say, 'We're opening up a whole bunch of competitive alternatives,'" Grunes said. "'If a few of them are tied up, what's the harm? You can't demand that we be perfect.'"

A spokesman for ICANN said that it cannot comment on any company's application.

If plaintiffs bring a Clayton Act claim to challenge Amazon's acquisitions of book-related domain names, a key precedent would be a 1963 Supreme Court case known as United States v. Philadelphia National Bank, Stucke said.

Under that case's holding, Stucke said that the plaintiffs, such as authors, would have to show that "not having the .book or .author or .read would put them at a significant competitive disadvantage."

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