This guest post was writting by Phil Corwin. Mr. Corwin is Founding Principal of the Virtualaw LLC consultancy and serves as Of Counsel to Greenberg & Lieberman and as for the Internet Commerce Association (ICA), all located in Washington, DC. This post is his personal opinion.

Expect the unexpected. Because it will happen. And it has just happened in the application phase of ICANN’s new gTLD program, with potentially profound consequences for the future of e-commerce.

During the three year period between the June 2008 ICANN Board approval of the new gTLD program and its June 2011 vote to proceed to the application stage, and even beyond then in the context of continuing GAC-Board discussions, only one competition issue ever became the subject of heated and protracted debate. And that was whether ICANN’s requirement for registry-registrar separation should be relaxed in concert with the new gTLD program, a question that ICANN eventually answered in the affirmative notwithstanding resistance from some members of the GAC.

But the consequences of that decision will hardly be a ripple across the Internet. While the consequences of what has happened could be a landscape-sweeping tsunami. And that is because the dominant search engine, Internet data aggregator, and Internet advertising provider, along with the leading online retailer, have emerged as the number two and three applicants for new gTLDs. Not just for their trademarks/brands, but for dozens of key generic terms. And, in a process that culminates in auction whenever any other non-community applicant for the same ‘string’ elects to stay in the fight, they have the bulging wallets to shove others aside and acquire their desired gTLDs. If they secure their bids the nature of Internet search and commerce could be permanently transformed in a manner far afield from the ‘competition and innovation’ mantra used to justify this massive roll of virtual dice.

The reaction has already started. In an article published in the June 14^thWashington Post just one day after ICANN’s “Big Reveal” event in London, titled “Google, Amazon lead rush to secure dot-dominance”, the perceived stakes were described:

Amazon and Google are staking claims to large swaths of the Internet under a new system for labeling Web domains, bolstering their ability to control traffic as the Web expands beyond the realms of “.com,” “.gov” and “.org.”

The bids by those companies to acquire new domain names such as “.book,” “.shop” and “.movie” renewed fears among competitors that a powerful few will dominate the Internet marketplace of the future…

If Internet users embrace the new domains, the companies that control them could bear considerable influence on Web traffic.

Amazon has applied to control the “.book” and “.movie” names, for example, meaning that anyone else selling those items would have to get the company’s permission to be listed within that domain.

The National Retail Federation had urged that oversight of such generic domain names be given to impartial entities rather than individual companies.

“The results for now are as potentially unfair to businesses and consumers as we feared they might be,” said Mallory Duncan, general counsel for the trade group…

Duncan said consumers may not realize that the new domains are under private control and that the open competition that prevails within the “.com” realm may not exist within, say, “.grocery.”

“Consumers going to that domain may not realize that all of their shopping is being done with one company instead of a competitive market,” Duncan said.

Google was among the most prolific applicants, seeking to register 101 names at an application cost of $18.7 million. Never lacking in its quest for virtual completeness, the company is seeking to control “.mom,” “.dad” and “.kid.”

Amazon applied for 76 new names, including “.amazon” and “.zappos.”…

Others, however, are bracing for the giants of the Internet to seize even more power over its commerce.

“It would be wrong on so many levels for Amazon to acquire either the ‘.book’ or ‘.author’ top-level domains,” said Paul Aiken of the Author’s Guild. “Their ambitions to extend their monopoly in bookselling have long been abundantly clear, and with their cash, their technical knowledge, this could be yet another way in which they’ve extended their control over the book market. This really makes no sense.” (Emphasis added)

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