[Community-Discuss] [rpd] Unaddressed queries by AFRINIC during AGMM

[Owen DeLong]

> On Jul 2, 2021, at 04:12 , Mike Silber <silber.mike at gmail.com> wrote:

> 

> Hi Owen

> 

>> On 2 Jul 2021, at 11:49, Owen DeLong <owen at delong.com <mailto:owen at delong.com>> wrote:

>> 

> 

>> 

>> So if a membership organization that is open to all service providers in the region is rejecting/terminating memberships solely on the base of their involvement in a particular legal second line of business outside the region and doing so to the detriment of their ability to provide the existing services in the region, you don’t believe that would be a form of tortious interference? Interesting. I defer to your greater expertise in this area, of course, but I find it surprising.

>> 

> I think you are missing a key component, I am not sure if intentionally or not? Membership organisations almost universally have a constitution / by-laws / criteria for membership / expected terms of behaviour. I am not aware of any country’s laws that allow one to insist on membership of an organisation - without also undertaking to abide by the relevant constitution / by-laws / criteria for membership / expected terms of behaviour.


In a case where a membership organization is the gatekeeper for industry self-regulation and/or for acquiring resources necessary to engage in a given industry, there are (at least in the US where I am more familiar with the legal framework) legal prohibitions against various forms of membership discrimination.

In the US, such organizations are usually referred to as “trade associations” and organized under IRS 501(c)(6).

A classic example would be something like an association of refineries that refused to sell gasoline to a particular brand of stations.


> If the rules provide for the eventuality you describe and IF proper process is followed (note the caveat), i see no issue with membership being rejected / terminated. It would be the equivalent of rejecting / terminating a membership if the (prospective) member does not pay the membership fees.


Interesting.


> My understanding is that for there to be tortuous interference, there must be a tort - which involves WRONGFULNESS. If the actions of the organisation are not wrongful, there is no tort and thus the consequences to the harmed party are irrelevant. If it wanted the benefits of membership - it should have played by the rules ….IF those rules are validly enforced.


Wouldn’t preventing an organization from acquiring resources to engage in legitimate business on equal terms with its competitors on the basis of it engaging in an equally legitimate action elsewhere in the world be considered wrongful? Certainly it is injurious to the business in question, certainly damages are easily provable in such a situation.

I don’t know about the situation in Africa, I admit, but at least in the US, there are definitely restrictions on how far rules can go in making such an organization selective.

Obviously the most classic examples are things like a country club can (no longer since some time in the 1970s) reject a member based on the color of their skin.

However, in general, a trade organization that is constructed in such a way as to clearly exclude members on some arbitrary basis not necessary to preserve the good order of the trade association would be considered anti-competitive in the US most of the time. (don’t get me started on the current makeup of the US federal bench, especially in light of today’s anti-democracy ruling from the top bench in the land).


>>> The Mauritian competition framework does not provide for extraterritorial jurisdiction - so I fail to see what basis there would be for any potential anti-trust action?

>> 

>> This makes me think, perhaps you misunderstand my example, or seized upon a less than perfect detail vs. the intended concept.

>> 

> No I didn’t but let’s try again.

> 

>> Let’s try it a different way.

>> 

>> Let’s say that there are two ISPs operating in Mauritius. One of them also operates an IP Brokerage in the Netherlands trading in allocations/assignments issued by RIPE-NCC and operating entirely within the RIPE-NCC policies.

>> 

>> Would you still say that it’s legal OK for AFRINIC to reject/terminate the membership of the one operating the brokerage in the Netherlands on that basis?

> 

> I am not sure why there needs to be two ISPs and what the relevance is of the second ISP. Above you were arguing it is a tort, now you are arguing anti-competitive action.


Above, I was arguing both as a possibility (and I still am), but you seemed to sidestep my anti-competitive argument above based strictly on the extra-territorial issue, so I put it into an intra-territorial context.

There need to be two ISPs because in order for it to be discrimination, you usually need to have a party that isn’t discriminated. 


> Anti-competitive conduct seems a huge stretch when the vertical relationship between AfriNIC and members operates on a not for profit basis and is not designed to favour any one or more party - only to ensure compliance with a set of rules. Would refusing service to a member that does not pay its fees be anti-competitive? If AfriNIC rejects/terminates membership of only one member …. when there are others behaving in the same way, then this conduct would more likely be a breach of by-laws and inequitable application of the rules, rather than anti-competitive. 


But if you are favoring parties that are not brokers entirely outside of the AFRINIC service region strictly on that basis, I think there’s a valid argument that such an exclusion is arbitrary and capricious which then becomes a harmful discrimination and can (AIUI) be used as evidence that the trade association is being structured to provide a competitive advantage to a subset of otherwise eligible members.


> I don’t see it as being anti-competitive as I fail to see the basis to argue a lessening of competition …. unless you have a conspiracy theory that is beyond me.


In the US, at least, it’s not just lessening of competition, but creating “unfair” barriers to competition that could run afoul of the Sherman act. Admittedly, precedent wanders greatly in this area and recent precedents have wondered almost as far as ever towards taking the teeth out of the Sherman act, but that pendulum seems to have started somewhat of a return trajectory (though the current 6/3 supreme court is a bit of a wildcard on that).

For example, Microsoft lost (at least initially) their case and was convicted of violating the act because their tight integration of Internet Explorer into Windows created an unfair barrier to entry for other browsers.

Owen

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