Ru-Center was not buying for itself
Egor Svechnikov, Lawyer at the Law Firm "YUST", gave an expert’s commentary to the Internet daily “Telecom Daily” on what could have served as a basis for revocation of the decision by the Federal Antimonopoly Service (FAS), which had blamed Ru-Center for dishonest competition (buyup of addresses) and collusion with other domain companies at registration in the .рф zone.
Ru-Center, a Russian registrar of domains, achieved the revocation of the decision of the FAS, which had blamed the company for dishonest competition (buyup of addresses) and collusion with other domain companies at registration in the .рф zone. The respective ruling was made by the Court of Arbitration of the city of Moscow. We remind that the Federal Antimonopoly Service initiated investigations of the actions of several registrar companies at the initial registration of domains in the .рф zone back in November 2010, and the FAS decided on the fact of dishonest competition from the part of the largest Russian registrar of domain names, the company “Regionalny Setevoy Informatsionny Centr (Regional Network Information Center)” in June 2011. The company acted under the brand “Ru-Center”. The FAS obligated “Ru-Center” to return 240 million roubles the company had gained from selling popular domain addresses.
Registration of domains in the .рф zone started on November 11, 2010, and approximately 240 thousand domains were registered during the first 24 hours, and over 700 thousand – during the first month. Ru-Center registered in its name approximately 62 thousand domains in the first hours after the registration was open.
The coordination center of the national domain of the Internet set a limit in the first day of the open registration, according to which every registrar was entitled to process up to 4.8 applications per hour. In order to circumvent the fixed limit, several registrars, including Ru-Center, directed its applications through other companies having previously made arrangements with them. The FAS has organized an investigation of the fact of collusion.
Ru-Center claimed that it had registered in its own name and put on auctions the domain names, for which more than one application had been filed, and that anyone could take part in the auctions – provided a client’s agreement was executed with the registrar.
The FAS responded that Ru-Center had granted the status of domain owner to the winners of the auctions, while remaining the domain administrator, for, according to the Registration Rules, the right to administer a domain registered since November 11, 2010, till November 10, 2011, could not be transferred to another person for a year.
The authority calculated the amount of the income received by Ru-Center from holding closed auctions on the .рф domains, administered by the Company itself, at 239,36 million roubles. The FAS issued an order to return the cash into the federal budget. The Company did not agree with this and resorted to the Moscow arbitration, winning the first instance.
Among the points argued by Ru-Center during the case consideration was the indication of incorrect calculation, done by the antitrust authority, of the market of domain name registration. The FAS did not take into account the international norms and the international segment of the Web’s address space. Also, the Ru-Center counsel claimed that there had been no coordinated actions between the registrars, since every registrar, to whom Ru-Center had assigned the applications of its clients during the first day of the open registration had processed its own clients’ applications first and only then started to process the applications of Ru-Center’s clients. And the lawyers of Ru-Center linked the large number of registered domain names to the necessity to service the applications from their clients, from whom the Company had received 120 thousand applications as early as the stage of placing preliminary orders. The press service of Ru-Center noted: “Actually, all forced domain owners will obtain the full status of administrators on November 11 of the current year, when the limitation of the change of administrator expires”.
E.Svechnikov, Lawyer at the Firm, believes that the failure to take into account international norms may have been one of the bases for the revocation of the FAS decision. Svechnikov commented: “It should be noted that violations committed by the antitrust authority during the analysis of the commodities market are by no means a rare base for laying claims against the FAS and, consequentially, a reason for revoking its decisions”.
He continued: “But, as a rule, the FAS have no difficulties in establishing the fact of coordinated actions. It is that the Board of the Supreme Court of Arbitration of the Russian Federation, by its Resolution № 30 dated 30.06.2008, has greatly simplified the process of proving the fact of coordinated actions”.
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