Network Solutions sued for Poaching Domains

Posted by: Jeffrey Neu

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Kabateck Brown Kellner LLP, a Los Angeles-based law firm representing search engine expert Chris McElroy filed suit against domain registrar Network Solutions, claiming the company created an illegal monopoly by temporarily holding domain names that potential customers searched for on its web site.

According to the suit and Network Solutions internal policies, after a customer searches for a .com domain on Network Solutions’ web site, the domain would be "purchased" by Network Solutions. The Internet Corporation for Assigned Names and Numbers (ICANN) established a grace period, whereby consumers could purchase a top level domain name (TLD), and return the domain within five days fo purchase, establishing a domain name purchase grace period.

This grace period has been exploited by registrars, who purchase TLDs to measure their profitablity, only to return the ones that are less profitable.

Network Solution calls its policy a “consumer protection measure,” and claims it is necessary to prevent customers from losing prospective domains to “front-runners,” who monitor domain search logs and quickly buy up searched domain names for themselves, hoping to sell them back to their original searchers.

Once purchased by Network Solutions, the domains can then cost as much as $34.99, or any price Network Solutions deems appropriate. The temporary purchasing of the domain forces users, for a period of four days, to purchase their domain through Network Solutions and at the inflated price..