[gnso-gac-closed-generics] Closed Generics Updates - 14 April 2023

[Greg Shatan [NARALO]]

All,

We are getting into definitional problems here, and we are muddling
different legal concepts.  [Note: While I am not an antitrust guru, I did
spend the first 12 years of my legal career primarily as an antitrust
lawyer and many years after that still practicing in the field. These days,
I'm more of a "recovering" antitrust lawyer.]  Let me try to bring some
clarity to these discussions.

"Unfair methods of competition" typically refers to anticompetitive
behaviors that fall outside the core activities prohibited by
antitrust/competition laws.  In some cases, these could lead to other
activities that violate antitrust/competition laws.  In other cases, these
fall into the category of "unfair and deceptive acts and practices," such
as "passing off," false advertising, "bait and switch," etc.  It's
typically not used to refer to "hardcore" antitrust/competition law
violations, such as price fixing, predatory pricing, tying, or, for that
matter, "collusion, restraints of trade that prohibit third parties from
supplying or offering to supply goods or services, or otherwise
monopolistically controlling, limiting, or restricting the supply of goods
or services, etc." (Also, by definition, collusion and monopolistic
behavior are very different concepts -- most basically, collusion involves
concerted action between two parties, while monopolistic behavior involves
the actions of a single party.)

"Anticompetitive behavior" is a very broad term that can encompass both
hardcore antitrust violations and unfair methods of competition, as well as
other behaviors that tend to lessen competition or to create competitive
advantages.

"Competitive neutrality" refers to concepts of maintaining a level playing
field amongst competitors and avoiding a structural competitive advantage.
It's part of competition law and policy but is conceptually separate from
"antitrust" concerns such as price fixing, collusion, monopolistic
behavior, etc.

These are all terms of art with relatively well-understood and settled
meanings in the antitrust/competition and unfair competition law fields.
Used properly and distinctively, they are not nebulous.

It is correct to say that violating competitive neutrality or creating
an unfair competitive advantage does not involve price fixing or other
collusive activities -- but those were never intended to be addressed in
the Closed Generics specifications.  Instead, we have always been looking
at the behavior of a single party (the registry) and not coordination
between two or more parties.  Trying to work in a requirement of violation
of collusive activities is taking us far away from our original concepts
and intentions.  Similarly, hardcore unilateral behaviors such as predatory
pricing, restricting output, tying or exercises of monopoly or market power
are separate from the concept of competitive neutrality (and its alter ego,
avoiding competitive advantage).

The concern addressed in the .SWISS case is one of competitive neutrality
and avoiding competitive advantage.  That is in fact what we are aiming for
here, and not for prohibitions against hardcore antitrust violations (and
particularly not coordinated behaviors).  The "good news" is that we don't
need to stray into discussions involving collusion, price fixing and
monopolistic behavior.

Whatever we end up with in our deliverable, we need to keep our concepts
and terms straight and our focus relatively narrow.

I apologize for not having some actual language to suggest here (at least
not yet), but I have run out of steam at 3:22 am....  Hopefully, I will
recover in the next 5 hours!

Greg

On Tue, Apr 18, 2023 at 4:04 PM John McElwaine <
john.mcelwaine at nelsonmullins.com> wrote:

> Jeff,
>
>
>
> That was my intent.
>
>
>
> John
>
>
>
> *From:* Jeff Neuman <jeff at jjnsolutions.com>
> *Sent:* Tuesday, April 18, 2023 4:02 PM
> *To:* John McElwaine <john.mcelwaine at nelsonmullins.com>; Melissa Peters
> Allgood <melissa.allgood at icann.org>; gnso-gac-closed-generics at icann.org
> *Subject:* RE: [gnso-gac-closed-generics] Closed Generics Updates - 14
> April 2023
>
>
>
> Thanks John.  I can live with your number 2 *If* all of those acts are
> predicated in violation of national laws.
>
>
>
> In other words, if I were to rewrite your #2 as I am ok with it being
> interpreted, it would be:
>
>
>
> .            For “non anti-competitive behaviour”, applicants must commit
> that its use of this closed generic gTLD will not be used to violate
> applicable national laws prohibiting unfair methods of competition.  This
> includes, but is not limited to, , such as collusion, restraints of trade
> that prohibit third parties from supplying or offering to supply goods or
> services, or otherwise monopolistically controlling, limiting, or
> restricting the supply of goods or services.
>
>
>
> In other words, it would not be for ICANN to determine what is
> “anti-competitive”, but rather such determinations would be made by courts
> of national jurisdiction.  If they found a violation of law, then ICANN
> would have to ensure the registry takes remedial actions.  ICANN Compliance
> should never be in the position of having to determine whether an action is
> ”anti-competitive” in any jurisdiction.
>
>
>
> Hopefully this is what you meant John.  If so, I can support.  If not, it
> is a red line for me to have ICANN compliance act as a substitute for
> regulator of national laws.
>
>
>
> Sincerely,
>
>
>
> Jeff
>
>
>
>
>
>
>
> Jeffrey J. Neuman
>
> Founder & CEO
>
> JJN Solutions, LLC
>
> p: +1.202.549.5079
>
> E: jeff at jjnsolutions.com
>
> http://jjnsolutions.com
> <https://urldefense.proofpoint.com/v2/url?u=http-3A__jjnsolutions.com&d=DwMGaQ&c=qmi9WrYRGQEDDOxOwKrAjW7mWovpzN_EKyRbeK_zbP0&r=Kepk-9GEB6JgOj0vUGl8c0hdrRM7FW-8Is-VAQU1VAm5U0rBXiZs3BfB3GfKU2uR&m=MeoIhLexdpwao9NQLMENEawFWz_0kTVclFlB0Xk_SAtHPNGbTYinOoLoeRir7-ho&s=ez0rB5lxV3bl0kZ1GOvz_DjYm-vAme9Rusom0REQMCk&e=>
>
>
>
>
>
> *From:* gnso-gac-closed-generics <
> gnso-gac-closed-generics-bounces at icann.org> *On Behalf Of *John McElwaine
> *Sent:* Tuesday, April 18, 2023 11:59 AM
> *To:* Melissa Peters Allgood <melissa.allgood at icann.org>;
> gnso-gac-closed-generics at icann.org
> *Subject:* Re: [gnso-gac-closed-generics] Closed Generics Updates - 14
> April 2023
>
>
>
> With respect “representativeness”, I must respectfully state that the
> following is a redline for me:
>
>
>
>    1. *For “representativeness”, applicants must demonstrate that the
>    applicant represents all or a significant part of the businesses (or has
>    their agreement) in the industry or grouping related to the closed generic
>    term.*
>
>
>
> The revisions would *only* allow for a closed generic applicant that was
> an international trade association of businesses.  This is far afield from
> what we have discussed and would fall into the category of an impermissible
> Policy determination.
>
>
>
> I agree with the concept of  “Non Anti-Competitiveness” as a part of the
> Framework process as a part of the delegation section, which is Section
> IV.  However, we are discussing this mostly in a double-negative way.
> Moreover, this is an area of law that I fear we are trying to define and
> which is outside of our knowledge.  I prefer something like Proposed
> Alternative #1, which I would suggest is revised as follows:
>
>
>
> 2.            For “non anti-competitive behaviour”, applicants must commit
> that its use of this closed generic gTLD will not be used to violate
> national laws prohibiting unfair methods of competition, such as collusion,
> restraints of trade that prohibit third parties from supplying or offering
> to supply goods or services, or otherwise monopolistically controlling,
> limiting, or restricting the supply of goods or services
>
>
>
> Thanks,
>
>
>
> John
>
>
>
>
>
>
>
> *From:* gnso-gac-closed-generics <
> gnso-gac-closed-generics-bounces at icann.org> *On Behalf Of *Melissa Peters
> Allgood
> *Sent:* Friday, April 14, 2023 2:34 PM
> *To:* gnso-gac-closed-generics at icann.org
> *Subject:* [gnso-gac-closed-generics] Closed Generics Updates - 14 April
> 2023
>
>
>
> *◄External Email►* - From: gnso-gac-closed-generics-bounces at icann.org
>
>
>
> Hi all –
>
>
>
> I want to share a bit of the work that staff has done to support your
> efforts and provide more detail about the approach to our upcoming calls.
>
>
>
> *Discussion Draft v2.1
> <https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_document_d_1wtLVcyWhyrCaYl1iqlAncaIyrqpS-2D-2D0aPCTjpwMue7I_edit&d=DwMGaQ&c=qmi9WrYRGQEDDOxOwKrAjW7mWovpzN_EKyRbeK_zbP0&r=Kepk-9GEB6JgOj0vUGl8c0hdrRM7FW-8Is-VAQU1VAm5U0rBXiZs3BfB3GfKU2uR&m=ODO8endu2yFS9Q7WIZvDyDo1jWyvQo0fVRf64r8ZyBJHmS1kTm2DEU42C8rV4FGM&s=n6Zv8I5X6-mQu2qIZs8CpuYTk5kqq3ZsvNMfiqiSDUM&e=>*
>
> We will continue to work our way through all your inputs into this
> document. It has been cleaned up slightly, hence the v2.1, but nothing of
> substance has been altered. We will move through this document in the
> following manner:
>
>    - Section III.  Applying for a Closed Generic gTLD
>    - Section IV. Evaluating a Closed Generic gTLD Application
>    - Section V. Contracting & Post-Delegation Review
>    - Definitions
>    - Policy questions and possible implementation questions based on
>    group discussions to date
>       - I don’t anticipate getting into the substance of these and will
>       simply ask if the areas detailed properly encapsulate other conversations
>       had by this group
>
>
>
> In comments, staff have identified possible areas of duplication in
> upcoming points under discussion. When such areas arise, I will ask for the
> temperature of the room on the duplication issue before possibly moving
> onto the substance of the framework element.
>
>
>
> *Closed Generics Framework v3
> <https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_document_d_1u0Nb9-5FCJ-2D6R-5FZF4bt9wbkzxLhMKu64aKY-5FvzS3QixgQ_edit&d=DwMGaQ&c=qmi9WrYRGQEDDOxOwKrAjW7mWovpzN_EKyRbeK_zbP0&r=Kepk-9GEB6JgOj0vUGl8c0hdrRM7FW-8Is-VAQU1VAm5U0rBXiZs3BfB3GfKU2uR&m=ODO8endu2yFS9Q7WIZvDyDo1jWyvQo0fVRf64r8ZyBJHmS1kTm2DEU42C8rV4FGM&s=k27Asp9yNGvBNSgyJY2Pi8f1F7M5gBtFQCRbjkgfgm0&e=>*
>
> This is a clean copy of framework elements from Discussion Draft v2.1
> where the group has demonstrated broad agreement. This document will
> continue to evolve as you work through the remaining sections of Discussion
> Draft v2.1. *Please keep this document clean*. We will consider this
> document as a whole after we complete the remaining work found in
> Discussion Draft v2.1.
>
>
>
> *Proposed Edits to Representativeness or Non Anti-Competitiveness*
>
> Sophie has shared proposed edits to this element on the mailing list.
> Please respond on the mailing list if:
>
>    1. You disagree *and* this a red line for you
>    2. You wish to state a preference between the options presented
>
> Staff will incorporate your feedback on this element into Discussion Draft
> v2.1.
>
>
>
> *Upcoming Discussions*
>
> As we continue to work through Discussion Draft v2.1, I’d remind you that
> this is *not *the time to rehash previous positions. We all understand
> that many elements under discussion may not be the preference of a given
> individual while also not rising to the level of personal red line.
> Accordingly, *I ask you limit interventions to clarifying questions
> and/or indications that the text under discussion is a personal red line.*
>
>
>
> Finally, at this point in the work I ask you focus your energy on the
> spirit and intention of each framework element under discussion rather than
> details of the text. I recognize this is far easier said than done, but I
> ask we all try.
>
>
>
> As always, my sincere thanks for your continued hard work. We are getting
> there!
>
>
>
> Wishing you all a lovely weekend,
>
> Melissa
>
> *Confidentiality Notice*
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-- 
*Greg Shatan*
*Chair, NARALO*
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