[Ws2-jurisdiction] Our work so far, and a way forward

[Greg Shatan]

Some follow-up on the hypotheticals below, removing my rapporteur hat for
the purpose, but still trying to use objective legal analysis, rather than
seeking any particular result.

Greg

On Sun, Oct 16, 2016 at 1:54 AM, parminder <parminder at itforchange.net>
wrote:

> Milton,
>
> Thanks for your engagement with these issues . Some responses below.
> On Tuesday 11 October 2016 10:21 PM, Mueller, Milton L wrote:
>
>
>
>
>
> 1.      What happens if the concerned  US court holds .xxx to be against
> US's competition law? Describe the steps that will follow, and how can
> ICANN avoid bending its policy making process and authority to the will of
> the US state.
>
>
>
> MM: I don’t think that’s a problem for ICANN. It’s a problem for the
> entity that was delegated .XXX.  Since XXX holds a tiny sliver of the
> domain name market, even in the porn space, this is a very remote risk.
>
>
> Is there not problem even if .xxx was not a US company owned, which has no
> reason to like/ accept being governed by US laws? Milton, when we frame
> regimes for rule of law, and of justice, we do not say, well that is small
> fry, a small 'sliver of the market', rules and justice has to be the same
> for all - small or big. It is  a question of principle -- can US law force
> ICANN polices, or their operationalisation ? If they can, as you seem to
> agree here, it is problem that we must find a solution to.
>
> Annex 12 says "At this point in the CCWG-Accountability’s work, the main
> issues that need to be investigated within Work Stream 2 relate to the
> influence that I*CANN ́s existing jurisdiction may have on the actual
> operation of policies *and accountability mechanisms." (emphasis added)
>
> This is directly an issue where ICANN's existing jurisdiction has
> influence on actual operation of its policies -- in this case its policies
> under which .xxx was delegated.
>

​GS: If .xxx was not a US company, but it does business in the US, it
subjects itself to US laws; that has nothing to do with ICANN.  Some things
are unclear from your hypothetical:
1.  Is the US government the plaintiff alleging effects in US commerce, or
is the plaintiff a private party that alleges that it has been harmed by
.xxx's anticompetitive acts?
2.  What actions by .xxx have allegedly violated competition laws?  Have
they engaged in price fixing or bid rigging or predatory pricing​ or price
discrimination?
3.  If this was unilateral activity, what is the product market in which
.xxx has monopoly power or sufficient market power for this to be an
antitrust violation?  (As Milton points out, the answer is likely to be
"none," as individual TLDs are extremely unlikely to be considered
"markets" and .xxx would have only a small sliver of the total SLD market,
and thus would not be capable of violating the antitrust laws.  That is why
Milton mentioned that .xxx was "small fry."  Indeed antitrust laws are not
applied equally to companies with small market shares and large market
shares, nor should they be; companies with small market shares have no
market power, and thus can do things like price below cost, that companies
with high market shares and market power cannot do (e.g., a company with
market power pricing below cost for a sustained period of time in order to
drive smaller competitors from the market is engaged in "predatory
pricing," a company with a small market share pricing below cost for a
sustained period of time is committing business suicide or sacrificing
profit for market share, but they are not violating the antitrust laws.)
4.  If this was collusive activity, with whom were they colluding, and in
what market, and are they co-defendants (and if not, why not)?
5.  Are you assuming that the only way .xxx was brought into US court is
because ICANN "issued" the gTLD, and that every other test for *in
personam* jurisdiction
failed?  Since the "minimum contacts" for *in personam *jurisdiction are
quite low (transacting business within the state; committing a violation of
law in the state, committing a violation of law outside the state that
causes injury within the state, or having or using real property within the
state.), it is extremely unlikely that .xxx would fail them.  If it did
fail these test, it's essentially impossible for their to be a competition
law violation, since the minimum contacts test is aligned with the type of
activity that would be required to show that an antitrust violation
occurred.  So, if a plaintiff attempted to hail .xxx into court in the US,
but there was no activity that could serve as the basis of jurisdiction or
a claim, the case would be tossed, and it's reasonably likely the plaintiff
and their lawyers would be sanctioned.

On the other , if .xxx has violated US antitrust laws (which would require
both business activity and harm in the US), why shouldn't they be subject
to suit (by the government or a private party) in the US?  .xxx is just a
Registry business; it's not entitled to any particular immunities.

In the end, I see no connection between this hypothetical and ICANN's
policies or ICANN's jurisdiction of incorporation or HQ location.

>
>
>
>
> 2.      Same about .africa.
>
>
>
> Same response.
>
>
> Same response from me as well - other than that here, unlike for .xxx,
> those who claim the gTLD, and thus will be affected by an adverse decision
> of the US court, are parties not belonging to the US and thus should not be
> dictated to by US courts.
>

GS: ​In the .africa case, DCA sued ICANN and ZACR in the US.  They could
have chosen to try and sue elsewhere, since there are other places where
ICANN can be sued, but they chose the US.   DCA is seeking adjudication by
a court, and they chose the US courts, so this is not in any way a
situation in which DCA does not want to be "dictated to by US courts."​  As
for ZACR, they could have sought to be removed from the case due to lack of
minimum contacts with the US, and they may well have succeeded -- but then
they would be on the sidelines in a case where their ability to run .africa
was at stake, and that wouldn't be a very good choice.  It's an essential
factor of being a defendant that you don't get to choose the court in which
you're sued, at least not initially -- you can try to get out of the case,
or have the case dismissed for jurisdictional reasons, or have the case
removed to a different court with a greater interest in the case, after you
are sued.

Again, I see no connection between this hypothetical (or actual case) and
ICANN's policies or ICANN's jurisdiction of incorporation or HQ location.

>
>
>
> 3.      With 100s of new gTLDs getting operational, many of them private
> closed ones with generic names (but that is hardly the only issue, there
> could be many others), is it not obvious that we will be seeing many court
> cases around them... What would ICANN do the moment an adverse judgement
> comes?
>
>
>
> See above. Not an issue for ICANN. Most of these court cases are between
> private parties, but even regulations or antitrust actions would be
> directed against the holder of the gTLD, not ICANN. Only if ICANN itself
> were accused of fostering a monopoly would it be the target of such
> litigation.
>
>
> Again, you seem to be fully unaffected by how global parties - companies,
> and people - who expect ICANN to be a global governance body and thus do
> thing just-fully, and they able to partake equally of the rights and
> benefits of a global domain name governance systems are unable to fulfil
> this legitimate, and democratic, expectation. If this means nothing to you,
> and only such actions that directly affect ICANN's organisation etc are
> meaningful, I have not much more to say here... My principal case is of how
> ICANN's current jurisdiction affects the global DNS, its governance, its
> legitimacy, justfullness, etc -- and not just now it affects ICANN's
> organisation.
>
> Perhaps lets separate these two issues then, treat them separately. (1),
> impact of ICANN jurisdiction on ICANN's organisation, (2) its impact on
> ICANN governance and operation of global DNS, including allocation of
> gTLDs/ ccTLDs, and managing the relationship with them.
>
> For the me (2) is by far more important, but if (1) is your focus, we can
> consider them both, separately.
>

​GS: First, it's not obvious that we will be seeing many court cases around
new gTLD registries.  Second, if there are court cases, I assume that the
plaintiffs will bring them in a jurisdiction where the registry can be
"found", like any other business.  I doubt they will be sued in the US
solely on the basis that the company that granted them the right to operate
the gTLD is located here; and if suit is brought here, it's not at all
likely that this basis for jurisdiction will succeed (look at how the .ir
situation has resolved, and consider that .ir was involved as a TLD asset,
not as a registry business).​  If there's an adverse judgment, ICANN
typically wouldn't be involved -- unless the judgment called for a transfer
of the gTLD, and that would only occur in very limited circumstances.  If
that were the case, it wouldn't matter where the case was brought -- the
winning party would request that ICANN honor the court's ruling that the
plaintiff and not the defendant was entitled to the gTLD.  ICANN could
agree, or it could contest the award.  If the case was brought in France,
ICANN could contest it in the French court.  Alternatively, the plaintiff
could seek to enforce the judgment by suing ICANN in the US (but this would
happen in any jurisdiction where ICANN could be sued -- nothing unique to
the US).  Again, I see no issue.  There was a private dispute between two
parties, brought somewhere in the world.  This has nothing to do with
ICANN's current place of incorporation or HQ.

>
>
> 4. What if OFAC doesn’t give licence to ICANN for dealing with a
> particular country due to great deterioration of relationships with the US.
>
> Now, you have hit on a real issue. I  believe however that NTIA has taken
> some precautions here, but I don’t recall what they are.
>
>
> NTIA's  'precautions'  - even more so, the unrecollected ones :) - are
> meaningless for non US people/ businesses who really are looking to get out
> of NTIA's 'protection' - isnt that all this oversight transition is
> supposed to be about ?
>

​GS: I assume you are referring to "great deterioration of relationships"
between ICANN and the US, since "great deterioration of relationships"
between a country and​

​the US is the reason one needs an OFAC license in the first place.  First,
this is truly hypothetical -- OFAC licenses are granted based on their
merits, not on relationships.  Second, without examining the precautions
Milton mentions, it's premature to dismiss them.  Third, if the US
government did in fact withhold an OFAC license from ICANN out of spite, it
would severely damage the US's ability to serve as an appropriate home for
ICANN, and could lead to legitimate calls for an examination of ICANN's
location; this serves as a very significant deterrent against any such
behavior.

As to what the oversight transition was supposed to be about:  The purpose
of the IANA transition was not to make ICANN ​no longer subject to the rule
of law under US law.
It was about removing the unique relationship between the US and ICANN
embodied in the IANA contract, and allowing the global multistakeholder
community to oversee ICANN's activities, rather than the US
government.  Indeed,
the "enforceability" aspects of the Empowered Community's actions *depend* on
ICANN being subject to the jurisdiction of courts, and count on the
availability of US courts to enforce any action by the Empowered Community
where ICANN refused to comply.
​  If ICANN no longer had any contacts with the US, then ICANN would still
need to be subject to being sued in court somewhere for the accountability
mechanisms to work fully.  I understand that there are some who would like
to remove ICANN from the United States.  If, now or in the future, ICANN
cannot carry out its policies or the accountability mech​anisms do not work
because of ICANN's location, and the only remedy is moving ICANN so that it
can function, then there are methods to seek such a change inherent in
iCANN's governance structure (i.e., methods for changing the Articles,
where ICANN's jurisdiction of incorporation is set forth, and the Bylaws,
where ICANN's HQ location is set forth).  If this subgroup determines that
there is an issue where ICANN is currently unable to carry out policies or
the accountability mechanisms are impeded, we will look at all potential
remedies (and all of the consequences of such potential remedies).

>
>
> 5. What if the FCC revises its decision of forbearance about its authority
> over Internet addressing system (as it did on the issue of whether Internet
> was title one or title two)?
>
>
>
> MM: This would require legislation, because nothing in the existing
> Communications Act gives the FCC any authority over DNS or IP addressing.
> So this is just another example of “what if the US legislates to regulate
> ICANN in some way?” Which of course is a risk if ICANN were in ANY
> jurisdiction.
>
>
> This is not true -- in the same way as, without any new legislation, FCC
> revised its stand on forbearance over seeing Internet as a telecom utility,
> and made it title 2. 'Forbearance' has this legal meaning of legal
> authority being there but not being exercised -- FCC's chair has clearly
> used the term 'forbear' in recent utterances about FCC's authority over
> Internet addresses. And in any case, what if as you say such a thing will
> require a legislation from the US legislature -- that is no comfort to non
> USians/
>

​GS: I'm not going to wade into the complexities of FCC policy and scope.
If the US or any country or group of countries (e.g., the EU) actually
sought to usurp ICANN's role in DNS and IP addressing, that would be
something to deal with and consider remedies at that time.  As Milton
notes, this is a risk regardless of ICANN's location (and a risk that is
not necessarily tied to ICANN's physical location). ​


>
>
> 6. There are almost as many US agencies that can exercise mandate over
> ICANN's domain name policies as there are sectors that the Internet and
> thus its naming system impacts. (ICANN allowed some 'regulatory policies'
> to buyers of .pharmacy, and going forward as it also does this with many
> other sectoral domain names, all of these can be challenged, in the courts,
> as well as with sectoral regulatory bodies). What then?
>
>
>
> MM: These dangers are greatly diminished post-transition.
>
>
> I see now way how the danger of any US executive authority exercising
> mandate over ICANN have diminished post transition other than your word for
> it..... And then I do not want them diminished (even that they havent), I
> want them extinguished. Statutory US bodies need to and will do whatever
> they can to further their policies and law, and would order any US body
> accordingly - nothing has changed, one may just be imagining that it has.
>

​GS: This is far too generalized to be considered as a scenario.  What
agencies do you think have a scope of authority over ICANN, and under what
legislation?  If it's DOJ/FTC under antitrust law, this is actually an
accountability feature and not a bug.  The intent is that the antitrust law
be available in the event ICANN allegedly violates US antitrust laws.  (The
whole "antitrust immunity" discussion was completely misguided.)  As for
.pharmacy (or other TLDs) having certain safeguards, that is entirely a
policy and business decision ​by that TLD.  The new gTLD program was
intended to foster different business models, so this should be considered
a successful implementation.  Technically, it could be "challenged" -- but
under what cause of action?  What law is being violated that could lead to
either US government enforcement or a private party action?  And what does
ICANN's location have to do with the registry being capable of being sued
in the US, since any business or harm in the US is sufficient to sue the
registry in US courts, regardless of ICANN's location?


>
>
> If you even begin trying to deal with these questions, you will realise
> what a volcanic earth we are sitting upon, in refusing to see the public
> law jurisdiction issue.
>
>
>
> MM: Don’t agree we are sitting on a volcano, but do agree there are issues
> that need to be anticipated, a kind of “stress test”
>
>
> Yes, thanks, exactly that. We need to follow through each of these
> scenarios to possible logical conclusions - looking at all plausible ways
> they can go.
>

​GS: First, I don't see the hypotheticals regarding suing third parties in
US courts as really "stress tests" of ICANN's location, since there will
almost inevitably be other bases for being able to sue that party in a US
court, given the similarity between the minimum contacts required for that
purpose and minimum requirements to have a viable cause of action.  As
such, ICANN's location simply doesn't seem to be relevant to those
scenarios.  In those scenarios where the US government hypothetically seeks
to interfere with ICANN policy or with ICANN's accountability mechanism, I
think the overall "stress test" is whether ICANN could take steps *at that
time* to oppose such actions or, failing that, seek to remove itself
completely from US jurisdiction (and whether moving out of the US would
have that intended effect)?  I'm not aware of any reason that ICANN could
not try to do so, but it would need the global multistakeholder community's
agreement to do so.  A related question is whether the Empowered Community,
as the agent of the global multistakeholder community, could force ICANN to
move out of the US against ICANN's will -- and whether there are safeguards
against such an action so that it would only occur if there were a proper
basis for such a drastic act?  It's something we may need to look at, but
based on the escalating powers of the Empowered Community (up to and
including "spilling" the board, I think the community has the necessary
power to move ICANN under such exigent circumstances.

Greg
​


>
>
> parminder
>
>
>
>
>
>
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