FOR IMMEDIATE RELEASE
May 1, 2020
CONTACT:
Carter Dougherty
carter@ourfinancialsecurity.org
(202) 251-6700
Decision to Block Private Equity Takeover of Dot Org a Victory for Nonprofits
Federal Reserve, Department of Justice should block onslaught of private equity takeovers in wake of coronavirus economic fallout
Yesterday, the Internet Corporation for Assigned Names and Numbers (ICANN) rejected the proposed private equity takeover of the Public Interest Registry (PIR), the non-profit that manages the non-commercial, charity, and non-profit internet domain registry for all Dot-Org websites. The decision recognized that the private equity debt loads and extractive business model would hinder Dot-Org’s ability to serve its non-profit clients without raising prices, compromising service, creating new revenue streams that comprise users’ data and privacy, or otherwise imposing unfair costs on 10 million organizations.
“ICANN did the right thing saying no to the private equity takeover of a vital public resource,” said Patrick Woodall, senior research fellow at Americans for Financial Reform Education Fund. “It is critical to protect the millions of non-profit groups from private equity’s profit extraction, which could compromise their ability to communicate with their members and supporters.”
While ICANN’s rejection of the deal with Ethos Capital protects Dot-Org customers and users from such extraction for the time being, the predatory practices of the private equity industry pose a real threat to workers and consumers throughout the economy. Unfortunately, unless Congress and the Federal Reserve act to stop them, private equity firms are poised to profiteer mightily from the present crisis, with tremendous costs for the rest of us. Congress must resist calls from private equity executives to gain access to pandemic-related bailout programs, including limiting access to the Federal Reserve lending facilities. In addition to other immediate steps, Congress needs to make structural changes to this often abusive industry, primarily by passing the Stop Wall Street Looting Act.
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