One week after an Indiana judge ruled that Network Solutions was exempt from antitrust liability, the domain name registrar won a lawsuit that accused it of charging fees that were unconstitutional.
A panel made up of three circuit court of appeals judges unanimously agreed that Network Solutions has the right to charge an “intellectual infrastructure” fee, which makes up 30 percent of the registrar’s bills to customers. The suit was originally filed in 1997 by the American Internet Registrants Association, a non-profit group based in Washington D.C.
The plaintiffs charged that because Network Solutions was providing a government-contract service, the fee was an unconstitutional tax. The court considers Network Solutions a private company, and therefore is allowed to charge fees for its services.
“The question becomes whether domain name registration is a government service or thing of value with the Act’s meaning,” said the panel, referring to the Sherman Act. “The answer, we believe, is no. . . .A recent and novel function such as domain name registration hardly strikes us as a ‘quintessential’ government service. . .”
The panel also said that since the plaintiffs are not competitors, they lack the standings to make anti-competitive allegations.
“[The dismissal] lays to rest important questions concerning the services that Network Solutions performs for the Internet,” said ” said Michael A. Daniels, chairman and acting chief executive officer of Network Solutions.