Changes

===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. The 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>

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 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. The 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], ICANN.org. Published 17 June 2011.</ref>

* Vertical separation provides a balanced playing field for competition between registrars. The absence of expert advice to remove vertical separation and stakeholders consensus shows that the move may be premature and might result in negative market output for consumers.

* Vertical separation provides a balanced playing field for competition between registrars. The absence of expert advice to remove vertical separation and stakeholders consensus shows that the move may be premature and might result in negative market output for consumers.

* Vertical Integration might harm competition. The European Commission cited the CRA International Report of 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.  

* Vertical integration might harm competition. The European Commission cited the CRA International Report of 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.

* 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.

* 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 regarding competition. Referral to competition authorities depends on ICANN's discretion.

* The procedural approach of ICANN to refer an application to relevant antitrust authorities for "expert analysis and post ante determination" overlooks the fact that competition authorities have limited powers in implementing rules, which is based on a case-by-case market analysis. ICANN did not clearly identify specific laws that will serve as basis of its jurisdiction, in order to determine if there are concerns regarding competition. Referral to competition authorities depends on ICANN's discretion.

Thus, the EC encouraged ICANN to reconsider decision to implement the full removal of vertical separation of registries and registrars and to follow these suggestions:

Thus, the EC encouraged ICANN to reconsider their decision to implement the full removal of vertical separation of registries and registrars and to follow these suggestions:

# Conduct 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.

# Conduct 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 at the registry and registrar level.

# Provide new market data on the current degree of competition and cross-ownership at the registry and registrar level.

===Update in Response to RySG Memorandum===

===Update in Response to RySG Memorandum===

In March 2012, ICANN released an update on that status of vertical integration, following an inquiry from the [[GNSO]]'s [[Registry Stakeholder Group]].<ref>[http://domainnamewire.com/2012/03/13/icann-were-moving-forward-with-vertical-integration/ ICANN: We’re moving forward with vertical integration, domainnamewire.com]</ref> The update stated that ICANN had pursued the topic of vertical integration with two competition authorities, the United States Department of Justice Antitrust Division and the [[European Commission]] (EC).  The United States Department of Justice Antitrust Division confirmed that it was conducting no active investigation into the topic at this time. The EC stated that although it was supportive of vertical integration in theory, it was concerned about the full removal of vertical separation, especially for existing TLD registries like for [[.com]]. ICANN stated that as a result of these correspondences, it would move forward with the past proposed vertical separation plans, and develop a process which would allow existing registries to  

In March 2012, ICANN released an update on that status of vertical integration, following an inquiry from the [[GNSO]]'s [[Registry Stakeholder Group]].<ref>[http://domainnamewire.com/2012/03/13/icann-were-moving-forward-with-vertical-integration/ ICANN: We’re moving forward with vertical integration], DomainNameWire.com. Published 13 March 2012.</ref> The update stated that ICANN had pursued the topic of vertical integration with two competition authorities, the United States Department of Justice Antitrust Division and the [[European Commission]] (EC).  The United States Department of Justice Antitrust Division confirmed that it was conducting no active investigation into the topic at this time. The EC stated that although it was supportive of vertical integration in theory, it was concerned about the full removal of vertical separation, especially for existing TLD registries like for [[.com]]. ICANN stated that as a result of these correspondences, it would move forward with its previously proposed vertical separation plans, and develop a process which would allow existing registries to request an amendment to their existing contracts, permitting vertical integration and cross-ownership.<ref>[http://domainnamewire.com/wp-content/vertical-sep.pdf Response to GNSO Registries Stakeholder Group Memo Regarding Registry-Registrar Cross-Ownership], DomainNameWire.com.</ref> The full text of the reply can be read [http://domainnamewire.com/wp-content/vertical-sep.pdf here].

request an amendment to their existing contracts, permitting vertical integration and cross-ownership.<ref>[http://domainnamewire.com/wp-content/vertical-sep.pdf Response to GNSO Registries Stakeholder Group Memo Regarding Registry-Registrar Cross-Ownership]</ref> The full text of the reply can be read [http://domainnamewire.com/wp-content/vertical-sep.pdf here].

 

 

== References ==  

== References ==  

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[[category: glossary]]

[[category: glossary]]