OPINION
The Internet Corporation for Assigned Names and Numbers (“ICANN”) creates and assigns top level domains (“TLDs”), such as “.com” and “.net.” In 2012, ICANN accepted applications for the creation of new TLDs. This suit alleges that the 2012 Application Round violated federal and California law. The district court dismissed the complaint, and we affirm.
A. Top Level Domains
Each Internet website is assigned a unique Internet Protocol (“IP”) numerical address. For ease of searching, websites also have alphanumeric domain names, such as “nytimes.com.” The portion before the dot — “nytimes”—is called the “second level domain.” The portion after the dot— “com” — is the TLD.
There are three main types of TLDs— sponsored TLDs (such as “.gov” and “.edu”), restricted to users who meet specified criteria; country-code TLDs (such as “.uk” or “.fr”), controlled by sovereign nations; and generic TLDs (such as “.com” and “.net”), those at issue in this case, open to all users. Individual generic TLDs are operated by registries, such as YeriSign, which sell the ability to register a domain name with a particular TLD and maintain a zone file, or registry, of all the domain names associated with that TLD. These registries approve registrars, such as godaddy.com, to sell domain names incorporating those TLDs to the public.
A “Domain Name System” (“DNS”) links each of these unique domain names with the IP address corresponding to that website. When an Internet user searches for a domain name, the DNS converts the domain name to the IP address by searching a list of TLDs called the “root zone file” (the “Root”). Additional TLDs are made available by organizations other than ICANN on alternative root files. However, alternative root files can only be accessed through special settings not routinely employed by most Internet users. Thus, the vast majority of Internet users can only access websites with TLDs included in the ICANN controlled Root. When the complaint in this case was filed, ICANN included eight generic TLDs on the Root.
B. ICANN
The DNS and the Root were initially managed by the National Science Foundation. See Daniela Michele Spencer, Note, Much Ado About Nothing: ICANN’s New gTLDs, 29 Berkeley Tech. L.J. 865, 867-69 (2014). In 1997, the National Science Foundation transferred control to the Department of Commerce (“DOC”). The DOC later issued a white paper proposing that management be transferred to a private, not-for-profit corporation. See Management of Internet Names and Addresses, 63 Fed.Reg. 31,741, 31,741 (Jun. 10, 1998).
In 1998, the DOC contracted with ICANN, a non-profit corporation, to manage the Internet Assigned Numbers Authority (“LANA”). See Justin T. Lepp, Note, ICANN’s Escape from Antitrust Liability, 89 Wash. U.L.Rev. 931, 935, 959-60 (2012); Froomkin & Lemley, supra, at 15. ICANN thereby obtained the authority to operate the DNS and the Root, add new TLDs to the Root, and determine which registries would operate existing TLDs. The Memorandum of Understanding between the DOC and ICANN reserved the DOC’s right to withdraw recognition of ICANN. See Froomkin &
ICANN is controlled by a board of directors with qualifications along the lines proposed in the white paper; many are industry insiders. The government has no formal input into the selection of the directors. See Froomkin & Lemley, supra, at 10-11.
C. name.space
name.space is a registry specializing in “expressive” TLDs, such as .art, .food, .magic, .music, .now, and .sucks. According to the complaint, .name.space’s business model contemplates “the simultaneous operation of a significant number of TLDs.” None of name.space’s TLDs is currently available on the Root.
D. The 2000 and 2012 Application Rounds
In 2000, ICANN first solicited applications for new TLDs. The application instructions were seven pages, the fee was $50,000, and a single application could seek multiple TLDs. The application included a release of all liability against ICANN, name.space applied for 118 TLDs. ICANN approved only seven new TLDs, none of which was awarded to name.space.
In 2012, ICANN again accepted applications for new TLDs. This time, the application guidebook was 349 pages in length, the fee was $185,000, and each application could seek only one TLD. Unsuccessful applicants from the 2000 Round received an $86,000 credit on one application, but were required to waive any claims arising from the 2000 Round, name.space did not apply in 2012 because the financial and procedural costs were too high. As in 2000, applications for new TLDs in 2012 came largely from industry insiders.
The list of TLDs applied for by others in 2012 included 189 TLDs currently in use by name.space. As of the filing of the complaint, ICANN had not announced which new TLDs will be included on the Root.
E.Procedural Background
In 2012, name.space filed a complaint in the Central District of California, alleging that ICANN violated sections 1 and 2 of the Sherman Act, the Lanham Act, the California Cartwright Act, and the California Business and Professions Code in connection with the 2012 Application Round. The complaint also alleged common law trademark, unfair competition, and tor-tious interference claims.
In 2013, the district court granted ICANN’s motion to dismiss the complaint, holding that the trademark and unfair competition claims failed to present a justi-ciable case or controversy, and that the other claims failed to state a claim upon which relief could be granted.
II. Jurisdiction and Standard of Review
We have jurisdiction over this appeal under 28 U.S.C. § 1291. We review de novo dismissals for failure to state a claim, Coal. for ICANN Transparency, Inc. v. VeriSign, Inc.,
III. Sherman Act § 1
Section 1 of the Sherman Act prohibits conspiracies “in restraint of trade or commerce.” 15 U.S.C. § 1. A § 1 claim requires: (1) a “contract, combination or conspiracy among two or more persons or distinct business entities”; (2) which is intended to restrain or harm trade; (3) “which actually injures competition”; and (4) harm to the plaintiff from the anticompetitive conduct. Brantley v. NBC Universal, Inc.,
A complaint asserting a § 1 claim must allege facts “plausibly suggesting (not merely consistent with)” a conspiracy. Id. at 557,
The complaint in this case alleges that the rules and procedures governing the 2012 Application Round were the result of a conspiracy between ICANN, its board members, and industry insiders. As is common, the complaint includes no direct allegation of an agreement among the alleged co-conspirators. See Oltz v. St. Peter’s Cmty. Hosp.,
We cannot, however, infer an anticompetitive agreement when factual allegations “just as easily suggest rational, legal business behavior.” Kendall,
name.space contends that an anticom-petitive agreement nonetheless is plausible because the rules of the 2012 Application Round, including the application fee and limit of one TLD per application, were contrary to its business model. But, absent allegations that suggest ICANN’s decisions were illogical or suspicious, see Twombly,
The complaint alleges that ICANN’s board members had motive to design an application process that would benefit their corporate allies. But such motive alone cannot sustain a § 1 claim. See Matsushita,
name.space alleges that the rules advantaged the businesses with which some board members were associated. But, it
It may well be, as name.spaee claims, that an “open Internet” represents better public policy than one with a more limited supply of TLDs. But the DOC left that choice to ICANN. At bottom, name, space’s complaint alleges that ICANN’s actions should be viewed as arising from a conspiratorial agreement because a conspiracy is theoretically possible. But that is not enough to state a § 1 claim. We cannot infer a conspiracy based on speculation that the very type of board members the DOC sought must have conspired to restrain trade simply because the system they adopted made it difficult for name, space to carry out its business plans.
IV. Sherman Act § 2
Section 2 of the Sherman Act prohibits monopolization. 15 U.S.C. § 2. “There are three essential elements to a successful claim of Section 2 monopolization: (a) the possession of monopoly power in the relevant market; (b) the willful acquisition or maintenance of that power; and (c) causal antitrust injury.” Allied Orthopedic Appliances Inc. v. Tyco Health Care Grp. LP,
The complaint posits three relevant markets: (a) the market to act as a TLD registry; (b) the international market for domain names; and (c) the market for blocking or defensive registration services. ICANN, however, is neither a registry nor a registrar. Because ICANN is not a competitor in any of the three markets, they cannot serve as the basis for a § 2 monopoly claim. See Mercy-Peninsula Ambulance, Inc. v. San Mateo Cnty.,
name.spaee argues that ICANN should be considered a participant in the three markets because ICANN has ultimate control over TLDs, which are the essential aspect of each of the relevant markets. But this does not mean that ICANN competes in the markets. In Mercy-Peninsula, we addressed whether a county monopolized a market because it chose which company would provide paramedic services.
Even if ICANN competed in any of the relevant markets, § 2 liability could only arise if ICANN unlawfully acquired or maintained its monopoly. See Allied Orthopedic,
The DOC chose ICANN to manage the DNS and the Root. Barring predatory behavior, ICANN is “free to choose the parties with whom [it] will deal, as well as the prices, terms, and conditions of that dealing.” Pac. Bell Tel. Co. v. Linkline Commc’ns, Inc.,
Y. Trademark Claims
Trademark and unfair competition law protect against the misleading use of another’s mark. See Mattel, Inc. v. Walking Mountain Prods.,
“A question is fit for decision when it can be decided without considering ‘contingent future events that may or may not occur as anticipated, or indeed may not occur at all.’ ” Addington v. U.S. Airline Pilots Ass’n,
The Swedlow analysis applies here. See Image Online Design, Inc. v. Internet Corp. for Assigned Names & Numbers, No. CV 12-08968 DDP (JCx),
We are unpersuaded by name.space’s argument that the acceptance of the applications and fees alone constitutes infringement. The cases it cites all deal with situations in which the defendant clearly intended to violate plaintiffs trademarks in the near future. See Levi Strauss & Co. v. Shilon,
VI. Tortious Interference Claims
name.space alleges California common law claims for tortious interference with contract and prospective economic advantage. The elements of a tortious interference with contract claim are: “(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of the contract; (3) defendant’s intentional acts designed to induce breach or disruption of the contract; (4) actual breach or disruption; and (5) resulting damage.” Family Home & Fin. Ctr., Inc. v. Fed. Home Loan Mortg. Corp.,
VII. Unfair Business Practices Claim
“California’s statutory unfair competition laws broadly prohibit unlawful, unfair, and fraudulent business acts.” Sybersound Records, Inc. v. UAV Corp.,
VIII. Conclusion
For the reasons stated above, we AFFIRM the judgment of the district court.
Notes
. The white paper was cited repeatedly in the complaint and was therefore incorporated by reference. See United States v. Ritchie,
.The DOC, however, still retained the ability to move the IANA contract to another organization. See Lepp, supra, at 959-60. The federal government plans to end its coordination role when the current IANA contract expires in September 2015, and has asked ICANN to develop a transition plan. See Nat'l Tele-comms. & Info. Admin., NTIA Announces Intent to Transition Key Internet Domain Name Functions (Mar. 14, 2014), http://www.ntia. doc.gov/press-release/2014/ntia-announces-intent-transition-key-internet-domain-name-functions.
. name.space's complaint only challenges the 2012 Round's rules and procedures. We therefore do not consider today any questions concerning the subsequent delegation of TLDs.
. ICANN had also moved to dismiss on the ground that the release clause in the 2000 application barred liability on all claims. The district court converted the motion into one
. Because the analysis under the Cartwright Act, Cal. Bus. & Prof.Code §§ 16700-16770, is identical to that under the Sherman Act, see Cnty. of Tuolumne v. Sonora Cmty. Hosp.,
. No claim for conspiracy to monopolize was raised in the complaint.
. Contrary to name.space’s argument, this case is not akin to Tate v. Pacific Gas & Electric Co.,
. Like the parties, we treat the three related claims collectively.
. Because the complaint contains no allegations about delegations, we do not today consider whether an actual delegation would give rise to a justiciable controversy or the merits of such a controversy. See supra note 3.
