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→EC Concerns Over the Full Removal of Vertical Separation
===EC Concerns Over the Full Removal of Vertical Separation===
===EC Concerns Over the Full Removal of Vertical Separation===
On June 17, 2011, the Information Society and Media Directorate General of the [[European Commission]] (EC) submitted a non-paper regarding ICANN's proposed full removal of the vertical separation to the ICANN Board. Copies were furnished to [[NTIA]] Assistant Secretary [[Larry Strickling]] and to Assistant Attorney General Christine Varney of the Department of Justice Antitrust Division. EC identified the following issues:<ref>[http://www.icann.org/en/correspondence/eu-to-icann-17jun11-en.pdf Removal of Vertical Separation Between registries and Registrars for New and Existing gTLDs]</ref>
On June 17, 2011, the Information Society and Media Directorate General of the [[European Commission]] (EC) submitted a non-paper regarding ICANN's proposed full removal of the vertical separation to the ICANN Board. Copies were furnished to [[NTIA]] Assistant Secretary [[Larry Strickling]] and to Assistant Attorney General Christine Varney of the Department of Justice Antitrust Division. EC cited some issues and recommendations which include:<ref>[http://www.icann.org/en/correspondence/eu-to-icann-17jun11-en.pdf Removal of Vertical Separation Between registries and Registrars for New and Existing gTLDs]</ref>
* Vertical separation provides a balance playing field for competition between registrars. The absence of expert advice to remove it and stakeholders consensus is premature and might result to negative market output for consumers.
* Vertical Integration might harm competition. The European Commission cited the CRA International Report on 2008, which emphasized the risk of vertical integration wherein registries may discriminate independent registrars by lowering prices and providing better registry services to their affiliate registrars.
* ICANN does not have sufficient data to support the full removal of vertical separation.
* A consensus on the issue within the [[GNSO]] and internet stakeholders is lacking.
* The procedural approach of ICANN to refer an application to relevant antitrust authorities for "expert analysis and ante determination" overlooks the fact that competition authorities have limited powers in implementing rules, which is based on a case to case market analysis. ICANN did not clearly identify specific laws that will serve as basis of its jurisdiction to determine if there are concerns on competition. Referral to competition authorities depends on ICANN's discretion.
* The EC encouraged ICANN to reconsider its' decision to implement the full removal of vertical separation of registries and registrars and to accomplish the following suggestions:
# seek independent economic and legal expert studies regarding the present situation of the domain name market and evaluate the impact of the existing restrictions on vertical integration. The impact of partially or totally removing the restriction on innovation and to consumers.
# provide new market data on the current degree of competition and cross-ownership within the registry and registrar level.
# provide data and documents supporting ICANN's decision to fully remove vertical separation.
# provide comments regarding the procedural concerns raised by EC.
==References==
==References==