U.S. Senator Elizabeth Warren and Representative Jerry Nadler have called for a federal investigation into VeriSign Inc. for its handling of pricing for .com domain names. In a joint letter sent to the Department of Justice (DOJ) and the National Telecommunications and Information Administration (NTIA), the lawmakers accuse the company of abusing its dominant position in the market by raising prices without improving services.
VeriSign, which administers .com domains, is granted exclusive rights by the government to control these addresses, making them a valuable asset on the internet. Warren and Nadler argue that this monopoly-like power enables VeriSign to charge excessive fees that harm businesses and consumers alike.
The 30% Price Increase Under Scrutiny
At the heart of the lawmakers’ concerns is a price increase approved in 2018 by the NTIA, which allowed VeriSign to raise the cost of .com domains by up to 30%. According to Warren and Nadler, this price hike was implemented with no corresponding improvements to the company’s services, leaving customers with no choice but to accept the inflated fees.
“VeriSign is exploiting its monopoly power to overcharge users for .com domains,” their letter states, adding that the company’s services remain unchanged, yet it continues to profit from its exclusive position.
VeriSign Defends Its Practices
In response, VeriSign has rejected these accusations, labeling them as misleading. A company spokesperson argued that the criticism stems from a small group of domain investors with a vested interest in the issue. In a blog post, VeriSign also defended its pricing strategy, claiming it does not operate as a monopoly, citing the existence of over 1,200 alternative domain extensions like .org, .shop, and .ai.
Despite these defenses, Warren and Nadler argue that VeriSign’s exclusive control over .com domains grants it an unfair advantage, one that enables the company to dictate pricing without facing competition.
Potential Antitrust Violations
Warren and Nadler’s letter also raises concerns that VeriSign’s practices may violate antitrust laws, particularly the Sherman Antitrust Act. They point to the agreements between VeriSign, the NTIA, and the Internet Corporation for Assigned Names and Numbers (ICANN), which oversees domain names, as evidence of a system that enables monopolistic behavior.
In particular, they highlight a 2020 agreement between VeriSign and ICANN that allowed VeriSign to raise prices in exchange for a $20 million payment over five years. The lawmakers argue that this deal is indicative of a collusion between the two entities, undermining fair pricing practices.
Activists Echo Concerns
The concerns raised by Warren and Nadler have been echoed by a coalition of activist groups, which in June wrote to the DOJ and NTIA calling for a review of the relationship between VeriSign and ICANN. The coalition accused the two organizations of functioning as a “de facto cartel” and urged the government to take action to break up what they described as an “incestuous legal triangle” that shields VeriSign from antitrust scrutiny.
Government Review and Future Implications
The NTIA has not yet responded to the lawmakers’ letter, but it has previously expressed concerns about VeriSign’s pricing practices. The current agreement between the NTIA and VeriSign is set to expire on November 30, presenting an opportunity for the Biden administration to implement stricter regulations on pricing. If renewed, the terms of the agreement could remain in place for another six years, impacting millions of users who rely on .com domains.
Warren and Nadler have called on the DOJ to investigate potential antitrust violations and urged the NTIA to adopt measures that would prevent further price exploitation by VeriSign. Their letter emphasizes that VeriSign has enriched its investors by charging unfair prices while offering no tangible improvements to its services.
