This one was as predictable as lawsuits ever get: A Los Angeles firm this afternoon has announced a class action against Network Solutions and ICANN over the former's practice of locking up domain names as soon as they are searched for on its site, which means the party searching can buy the name only from Network Solutions.
The practice has been highly controversial and now lawyers at Kabateck Brown Kellner are tossing around words such as "defraud" and "scheme." They're also suing ICANN for failing to stop what is known in the industry as "front running."
From the press release:
Network Solutions has forced millions of people to buy Internet domain names from them instead of cheaper competitors through a scheme that's netted the firm millions of dollars, a federal class action lawsuit filed today by Kabateck Brown Kellner, LLP states. ICANN, whose policies facilitate the scheme, is also named in the suit, filed in U.S. District Court, Central District of California.
"Imagine if you asked a car dealer if they had a black convertible and were then forced to buy the car from them. Would you get a good deal? Each time someone asks Network Solutions about a domain name, the firm creates a
monopoly for itself, forcing consumers to pay the price they demand," said Brian Kabateck, lead counsel in the class action and Kabateck Brown Kellner's Managing Partner.
A spokeswoman for Network Solutions tells me the company has yet to receive papers regarding the lawsuit and that it will not likely have a comment about it today.
Network Solutions has defended the practice previously with a lesser-of-two-evils rationale, contending that their locking up of searched-upon names actually protects those names from being snapped up by "domain tasters" who register names by the thousands without paying a penny, thanks to a five-day grace period, a loophole that ICANN only recently promised to close. ICANN has indicated it has no problem with front running.
Plaintiffs' lawyers aren't buying that argument:
This allows Network Solutions to continue charging substantially higher prices for domain name registration. Network Solutions charged $34.99 to register the name sought by this suit's lead plaintiff. A competitor would
have charged $9.99.
I've contacted ICANN but have yet to receive a reply.
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Imagine if you asked a car
Isn't that why you'd go to a car dealer? Because they're currently the only one selling the particular black convertible you want?
What makes this unique is a domain name can be searched in various registrars, but only one can register it. It's not like Network Solutions is permanently preventing users from being able to register the desired domain name elsewhere. (if they're willing to wait up to 4 days or call them to delete, that is...)
Anyway, this is what happens when you give someone a cause to sue you, even if you believe you're right. Ngyerk.
Yes, good luck talking to
Yes, good luck talking to Netsol people on the phone. They are pushy and stupid. They could care less about you and will push sales in your face until you hang up. Chances are if you called Netsol on this issue the person on the phone would have no idea what you were talking about because they don't keep their employee imformed about anything except what over price usless product to sell. Even if they did understand your question, it would take them at least 3 to 5 business days to fix it.
If I want a Domain name and I want it now, not 4 days from now that is the problem. If it's availible now, I should be able to get it at any registrar. Since it only held by Netsol for 5 days, how do I know exactly when it's availible again? By then someone else could grab it as soon as its on the market.
Netsol still owes me
A full refund on a domain registration that was fully paid for that they sold out from under me anyway despite the fact that I owned it!
The phone conversations were pretty damn stupid too...
NSI and ICANN Liability
click the link above to get a complete analysis of the issues.
I agree that Network Solutions’ business plan to “reserve” all available name search queries was questionable from an ethics and business point of view. I, for one, am surprised that Network Solutions and ICANN have been sued in a class action format.
I originally posted about potential consumer protection liability related to NSI’s reserve policy here, but NSI quickly modified it’s policy and provided adequate notice on its web site in order to inform consumers that it would be reserving searched domains. That post is found here.
Consumer protection lawsuits are all about misrepresentation and “deception.”; Once Network Solutions posted notice on its web site that it would be engaging in this particular business practice, it is hard to imagine how consumers would argue they were “deceived.”
As far as ICANN liability, the only possibility is an argument that Network Solutions was violating the accreditation agreement with ICANN and ICANN failed to follow-up on that known violation. However, I have not seen any good analysis on the Internet which suggests that a violation of policy did occur.
Sorry to inform you about - NSI and ICANN Liability
I'm sorry to inform all of you, but what my company has done is totally within legal guidelines... Call it what you want, a customer-protection measure, frontrunning, it doesn't matter, b/c its legal. ICANN has put their 5-day rule into place, for situations where misspellings, accidental purchases, or whatever have occured. No foul there. If you dont want us to hold your domain name for 4 days before you can buy it SOMEWHERE ELSE, don't use NSI.com to search for your domains. If you dont like our pricing, dont use our site, thats basic economics. And as far as our sales techniques go, we do that so we can make our company enough money to keep them motivated to NOT oursource our jobs, and it works. Gotta stay in the green to keep your job. Thats common sense. Anyways, anyone who doesnt like it can go pound sand.
NSI
http://www.networksolutions.com/whois/index.jsp
Yeah, too bad there is NO NOTICE given prior to running a whois query that clearly states that NSI will snag a domain name and force you buy it through them or wait 4-5 days and HOPE you can pick it up after being released without someone else who is scanning for NSI registered domain names buys it up and squats on it anyway.
NSI's policy does nothing for consumer protection. It's purely there to try to force/convince customers they have no choice but to pay the $34.99 fee. What NSI is doing is really no better than people buying up domain names in hopes of someone wanting them one day and wanting them bad enough to pay a premium to get them back.