Network Solutions sued for price fixing Network Solutions is being sued for front-running internet domains. In early January, the well-known domain registrar started self-registering domains that customers search for but don't immediately buy. The company insists it's merely trying to crackdown on so-called "domain front running," but at least one customer is clever …
They don't charge a higher price for the domain they are front-running. If I were on a jury, I couldn't award any damages on it. If they raised the price, sure. But they don't, so I couldn't.
To me, it is a reasonable argument that they are protecting their customers. They run a store, and the transaction in their store begins with a customer searching for a domain. It "could" be reasonable for them to assume that the customer intends to complete their transaction, on their site.
They are not raising the price. If you are smart enough to know that you can get the domain much cheaper elsewhere, why are you using their site?
There could be an argument that there is a risk that a domain squater will scoop up the domain as soon as netsol drops it, and then you will never get it. But that only reinforces netsols argument for front-running.
But if someone was dumb enough to use them, then sued based on the deceptive "add ons", I would have to award a judgement. Their site looks like it makes it pretty tough to get through an order without adding something by mistake. I don't think I have ever seen a site where you have to uncheck so many boxes and hit "no thanks" so many times, just to prevent getting ripped off even worse.
I have a little bit of an idea of what I am doing, but their order page made me think "oh, they cut their price to $9" (but only for a second).
Checking a domain name on a website is not like going into a restaurant and looking at a menu - there is no implicit presumption that you intend to use the service simply because you looked to see what was available.
I browse books on Amazon, check out the specs of computers I can't afford, and visit Asia Carrera's website. This does not indicate an intention to read, buy or sleep with the items in question.
What netsol is doing is observing an interest in a name, and then making sure that this name is available only from them - at an above market price. 'I have a little bit of an idea of what I am doing ..' So that would be the proverbial 'a little knowledge'?
Does this mean that someone could write a script that just requests every possible domain name going, and they will reserve it? If so, soon, the only domain available will be zzzzzzzzzzzztheregister.com
Does it also mean that Network Solutions has to pay a fee for each domain they register? Could they over commit themselves to expenditure if they were to commit to registering (but then not selling) 50million domains per month?
"They don't charge a higher price for the domain they are front-running."
Yes they do, if you register it through someone else they get zero, zip, nada, they are also more expensive than other registrars. By front running the domain you just queried for, they are forcing you to buy it through them. Not only that, they refuse whois information to other sites, you have to check the whois feed on their site for domains in their control, so they know which domains to front run by your query.
"It "could" be reasonable for them to assume that the customer intends to complete their transaction, on their site."
It *is* unreasonable to *force* it so that the customer has to complete their transaction on their site, especially when they forced the customer to query for the domain on netsol site in the first place.
Then there's the expired domain mock auction, where they force you to bid on expired domains they are still holding but won't release, and the price suggested is inflated as though an auction is happening. I usually just stop looking at the domain (stop querying netsols whois), after a while of not looking it will be released, I can then buy it for the normal price through other registrars. To me that confirms I was being faced with a mock auction scenario.
"If so, soon, the only domain available will be zzzzzzzzzzzztheregister.com"
I don't think so
Registrant:
This Domain is available at NetworkSolutions.com
13681 Sunrise Valley Drive, Suite 300
HERNDON, VA 20171
US
Domain Name: ZZZZZZZZZZZZTHEREGISTER.COM
------------------------------------------------------------------------
This Domain is Available - Register it Now!
600,000 domain names are registered daily! Don't delay; there's no guarantee
that a domain name you see today will still be here tomorrow!
Register it Now at www.NetworkSolutions.com.
------------------------------------------------------------------------
Administrative Contact, Technical Contact:
Network Solutions, LLC domainsupport@networksolutions.com
13681 Sunrise Valley Drive, Suite 300
HERNDON, VA 20171
US
1-888-642-9675 fax: 571-434-4620
Record expires on 26-Feb-2009.
Record created on 26-Feb-2008.
Database last updated on 26-Feb-2008 05:35:24 EST.
Domain servers in listed order:
ns1.reserveddomainname.com 205.178.190.55
ns2.reserveddomainname.com 205.178.189.55
There is still the unanswered question of why Network Solutions thinks this is necessary. The only way this could possibly be necessary to "protect" their customers is if third parties were actively registering domains queried through Network Solutions' servers. And the only way third parties could get those queries is if there was a pretty big security hole in Network Solutions' servers.
So which is it? Are they front-running in an attempt at price-fixing, or are they "protecting" their customers (which proves they have a security hole they refuse to fix)?
"it is a reasonable argument that they are protecting their customers"
NO!
The offense is that the individual doing the search is NOT YET a Network Solutions customer - at the point the offence occurs, the person is only checking domain availability. This practice forces them to become one, and thereby forces them to pay a higher fee than if they had registered through an alternative company.
Come on, this is blatantly a digital protection racket and Network Solutions should get their arses kicked.
Just added majornewdomain.com to a cart (nothing else) and found they'd grabbed it.
Whois Server Version 2.0
Domain names in the .com and .net domains can now be registered
with many different competing registrars. Go to http://www.internic.net
for detailed information.
Domain Name: MAJORNEWDOMAIN.COM
Registrar: NETWORK SOLUTIONS, LLC.
Whois Server: whois.networksolutions.com
Referral URL: http://www.networksolutions.com
Name Server: NS1.RESERVEDDOMAINNAME.COM
Name Server: NS2.RESERVEDDOMAINNAME.COM
Status: clientHold
Updated Date: 26-feb-2008
Creation Date: 26-feb-2008
Expiration Date: 26-feb-2009
NameZero did it to me when I wanted to buy my own domain name. It was a safe bet that someone would want it (and it had been registered in the past) so they charged me some ridiculous fee to get the domain.
At the time, I didn't know better so I paid. I then learnt better and shifted it to a cheaper provider PDQ.
What's interesting is that if you or I do this, it's called cybersquatting, but since Netsol holds the strings and can automate the 5-day-free-registration thing, it's called 'protecting consumers'
I'd better not say which registrar it was as it was about 6 months ago, and they may have changed their habits.
I was interested in a .com domain, and checked it with another registrar's site. Then went back a week later, this time intending to buy. In that time it had been registered not by the domain registrar, but by someone from a residential address in New York. So I settled for a .co.uk instead.
No way that I am buying off a speculator. The shame is that they almost get it free when they do so much of it.
Chris C wrote:
"The only way this could possibly be necessary to "protect" their customers is if third parties were actively registering domains queried through Network Solutions' servers. And the only way third parties could get those queries is if there was a pretty big security hole in Network Solutions' servers."
It's just a http request so any network admin between your machine and their server can see it in the clear.
I haven't seen proof that Network Solutions sells the search data to third parties, but they would be within their rights to do so (and it's probably worth quite a bit of money).
And it's not just Network Solutions who can monetize DNS queries. Any big ISP running a nameserver could keep count of common mis-typed domain names which don't have a record and sell that information to squatters.
You can use command line tool like "host -a domainname.com" (or digg, nslookup, etc) to see if a domain is registered and this won't trigger the front-running. If it is registered then you can then go to the whois and take a closer look at who it's registered to and when it expires.
@Nick: No, they don't have to pay a fee for these registrations.
Network Solutions was once the only game in town. Verisign bought netsol, then sold them. Verisign is the registry for .com and .net, they retained that part of netsol. Verising sold netsol and now netsol is just an icann authorized registrar, like godaddy, tucows, etc.
So Netsol does not have access to every query for every domain in the world. Just the ones done on their site. It does not look like they are registering random addresses, just the ones that are queried on their site.
Doing a whois lookup for a domain on their site does not force you to look up other domains on their site. Amazon sells books that may have 1,000,000 copies in print, but there is only one of every domain name.
There is competition in the registrar biz. They don't have a monopoly. If you don't like their business practices, don't use their site to lookup new domains. If porn offends you, don't rent porn. etc.
I have talked to quite a few people over the last several years who would wonder why the domain they looked up yesterday, isn't available today. They would say "I looked it up on google, then I checked it on a whois site that came up on google, then I price shopped at several registrars. It was available. Today it is taken and the domain has a page that says the domain is available for $100".
This sort of thing has gone on for a while. Netsol is just doing it out in the open, under their own name, and they aren't raising the price. They should be more transparent about it, that is for sure. Maybe a notice of the exact time that they will release a domain, after it is queried.
Maybe every registrar should have an option to let the customer pay $0.20 to reserve the queried name for 24 hours "to protect the customer". But it would be hard to get all the registrars to all play by the same rules. So that would require icann to make policy (hah!).
"we have implemented a security measure to protect *our* customers."
You have to put the emphasis in the right place. They are ensuring that they will have customers in the future. If they didn't do this, they wouldn't have any customers. So they are protecting their customers.
ICANN has already decided that its per domain fee (which ATM amounts to about US$0.20 per name) will apply for all newly-registered domain names, regardless of whether they are deleted within the Add Grace Period. At present, a domain deleted within the AGP is refunded both Verisign's registry charge (US$6.70) and the ICANN fee.
This means the cost of doing what NetSol are doing will increase massively, from zero to thousands of dollars a day. It will have the same effect on the bottom-feeders that engage in domain tasting and domain kiting.
It's about the first time that ICANN have done something of real value to anyone.
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