Barnes & Noble Weigh In On Amazon’s New TLDs

Some pretty big companies are beginning to show an active interest in ICANN’s new TLD project. The most recent of them is bookseller Barnes & Noble.

The letter, which is available both on the ICANN website and below, is quite narrow and pointed in its scope and focusses on the perceived competition issues with Amazon’s bids for several “closed generics”:

BARNES&NOBLE
BOOKSELLERS
VIA FEDERAL EXPRESS
February 21, 2013
Mr. Fadi Chehade, President & Chief Executive Officer
Dr. Stephen D. Crocker, Chairman of the Board
ICANN
12025 Waterfront Drive Suite 300
Los Angeles CA 90094-2536
Dear Mr. Chehade and Dr. Crocker:
Barnes & Noble, Inc. submits this letter to urge ICANN to deny Amazon.com’s application to
purchase several top level domains (TLDs), most notably .book, .read and .author (collectively the
“Book TLDs”).1 Amazon, the dominant player in the book industry, should not be allowed to control
the Book TLDs, which would enable them to control generic industry terms in a closed fashion with
disastrous consequences not only for bookselling but for the American public. If Amazon, which
controls approximately 60% of the market for eBooks and 25% of the physical book market2, were
granted the exclusive use of .book, .read and .author, Amazon would use the control of these TLDs to
stifle competition in the bookselling and publishing industries, which are critical to the future of
copyrighted expression in the United States.
Amazon’s ownership would also threaten the openness and freedom of the intenet and would have
harmful consequences for intenet users worldwide. When ICANN announced its plan to increase
the number of TLDs available on the Domain Name System, one of its stated goals was to enhance
competition and consumer choice. However, if the Book TLDs applications are granted to Amazon,
no bookseller or publisher other than Amazon will be able to register second-level domain names in
.book, .read and .author without Amazon’s approval, leaving Amazon free to exclude competitors
and exploit the generic Book TLDs for its sole benefit.
Anticompetitive Threat and Harm to the Public
ICANN states that “[o]ne of its key responsibilities is introducing and promoting competition in the
registration of domain names.”3 Indeed, when announcing its plan to increase the number of TLDs
available on the Domain Name System, one of ICANN’s stated goals was to enhance competition
and consumer choice.4 As a result of ICANN’s decision to expand the number of TLDs, over 1900
1 Amazon has applied for numerous other generic TLDs in both English and in foreign languages, which
appications include such blatantly generic TLDs as .mobile, .music, .shop and .store.
2 See e.g. Financial Times “Publishers Task to Unlock eBook Market”, November 12, 2012,
http://www.t.com/intl/cms/s/0/a8f285ee-2370-11e2-bb86-00144feabdc0.html .
3 http://newgtlds. icann. org/en/ab out/program
4 ibid.
122 Fifth Avenue, New York, NY                                                                         10011   tel:   (212)   633-3300

Mr. Fadi Chehade and Dr. Stephen D. Crocker                                                                    February 21, 2013
ICANN                                                                                                          Page 2 of 3
applications were filed.5 A majority of these applications conformed with ICANN’s goals and fell
into two groups: (1) closed brand name TLDs, and (2) open generic TLDs.
However, Amazon disregarded the guidance of ICANN and instead filed new TLD applications for
generic terms in the very industries in which it holds signiicant market share, with the stated goal of
controlling those TLDs — including .book, .read and .author — as closed registries. The concens are
especially acute in the bookselling industry, where Amazon already maintains a dominant position.
As the Financial Times recently reported:
For though technological innovation has made it easier than ever before for readers to
buy books, there is a catch: a single retailer — Amazon — dominates the digital
distribution channels. Its power is set to become stronger as eBooks eat into print book
sales.
Financial Times “Publishers Task to Unlock eBook Market”, November 12, 2012
By controlling the Book TLDs, Amazon will be positioned to gain unfair advantage in direct
navigation and online search; will become associated with the very genus of books; and will likely
control the generic Book TLDs in perpetuity as the registry agreements permit unlimited automatic
renewal in ten-year terms. Additionally, Amazon will likely be able to prevent substantially similar
TLDs from registering in the future, such as .books. Needless to say, this will result in steep barriers
to entry for would-be competitors. As the governments of Australia and Germany noted during the
GAC Early Waning Process with regard to generic TLDs, there will be a significant “negative
impact on competition” by barring other entities, especially competitors, from using those generic
TLDs.6 The Government of Australia also specifically objected to Amazon’s applications for closed
generic TLDs, including objecting to Amazon’s application for the .book TLD.’
Ownership of common industry terms as closed generic TLDs by industry players would be
anticompetitive and limit consumer choice across the Internet. This is especially true with regard to
Amazon, which has a history of anticompetitive activity. Additionally, Amazon’s anticompetitive
activities would not only affect its competitors in the bookselling industry but would also impact the
future of copyrighted expression. See e.g. Barry C. Lynn, Killing the Competition: How the New
Monopolies Are Destroying Open Markets, Harper’s Magazine, February 2012, at 33 (“Amazon “has
long since accumulated sufficient inluence over their [publishing] business to ensure that these most
dedicated defenders of the book — and of the First Amendment — dear not speak openly of the
company’s predations.”)
Part of what has contributed to the vibrant growth of the intenet is the ability of consumers to
transcend physical boundaries to share information and find economic opportunity worldwide.
People and companies have freely registered domain names in TLDs of their choice, whether the
traditional .com TLDs, or more specific TLDs such as .mobi and .org. This has been critical to the
success of the intenet. The potential acquisition by Amazon of the Book TLDs threatens this
balance.
5 http://www.icann.org/en/news/announcements/announcement-13jun12-en.htm
6 See e.g. https://gacweb.icann.org/download/attachments/22938690/Search-AU-
13549.pdf?version+l&modificationDate+1353432052000
‘ Ibid. See also Book and Publishing, Australia Objects to Amazon’s Application for .book, December 7, 2012,
http://www.booksellerandpublisher.com.au/DetailPage.aspx?type=worlditem&id=25783

Mr. Fadi Chehade and Dr. Stephen D. Crocker                                                              February 21, 2013
ICANN                                                                                                    Page 3 of 3
If ICANN allows Amazon’s closed generic TLDs to proceed however, consumers freedom of
expression will be limited. Consumers who are searching for books and associated digital content
want choice, not the product or service of a specific company. Unfortunately, the undoubted
consequence of Amazon’s controlling the Book TLDs is to hand the power to Amazon to exclude
competitors and exploit the generic Book TLDs for its sole benefit.
Conclusion
Amazon’s clear goal is to dominate the bookselling and publishing markets. Their drive to further
consolidate these markets will be greatly aided by their control of the .book, .read and .author TLDs.
By having Amazon control these TLDs, creativity will be limited and content diversity threatened.
The solution is to deny Amazon’s closed TLD applications or in the alternative to require that
Amazon operate such TLDs as open registries, allowing free access to competitors.
Please contact Mr. DeFelice at 212-352-3888 or Mr. Feuer at 212-633-3245 should you have any
questions or comments.
Thank you for your time and consideration.
Sincerely yours,
&ea                                                                                                      °
Eugene V. DeFelice
Vice President, General Counsel & Corporate Secretary
Bradley A. Feuer
Vice President, Assistant General Counsel

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