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!