Could ICANN Prohibit Registrars from Investing in Domain Names?

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A UDRP was filed against the VOCL.com domain name, and the single member panel ruled in favor of the complainant. A request made by the panelist in the decision could be concerning to domain registrars that own domain names as investments or are directly related to domain investment businesses.

You should read the entire decision to understand what occurred, but here’s an excerpt from the decision that could be particularly concerning to some domain registrars:

“This misconduct by the Respondent and by the Registrar is troubling. It is all the more troubling because it appears to have been designed to improve the Respondent’s prospects for success in this proceeding. It raises significant questions as to the propriety of a Registrar being allowed to buy and sell domain names for its own account (or the propriety of a Registrar’s subsidiaries, officers or employees to engage in domain name speculation). This is an issue that the Panel believes should be addressed by ICANN, and the Panel requests that the Center share this decision with ICANN so that ICANN may consider whether to impose restrictions on such behavior by registrars. See, e.g., Registrar Accreditation Agreement, sections 3.7.9 (“Registrar shall abide by any ICANN adopted specifications or policies prohibiting or restricting warehousing of or speculation in domain names by registrars”) and section 1.3.2 (noting that ICANN may establish specifications and policies on “prohibitions on warehousing of or speculation in domain names by registries or registrars”).”

If ICANN were to rule that domain registrars can not invest in domain names directly or through subsidiaries, that would have an impact on several domain registrars. Quite a few domain registrars are associated with domain investment portfolio companies. Some own domain names in internal portfolios, others have a “sister” company that buys and sells domain names as investments, and others own companies that have domain name investments. I do not know the different legal structures so I won’t speculate about what companies could be impacted.

I do not know how seriously ICANN will look at an issue like this. I don’t really even know if there’s anything ICANN can do to prohibit a registrar or associated entities from owning domain names as investments since that is a super complicated matter and probably fairly easy to get around. If ICANN were to take a serious look at this type of scenario, I am sure it would be concerning to quite a few domain registrars.

About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.

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6 COMMENTS

  1. yeah… not gonna happen.
    Those sections in the agreement have been ignored forever. Basically ever since registrars were given permission to auction off expired domains of their clients and pocket the proceeds. Dave Bernstein is delusional.

  2. That ship sailed and sank over a decade ago. ICANN is unlikely to prohibit some of its biggest customers (major registrars) from the highly profitable business of owning and monetizing their own domain portfolios.

  3. But, can a government force them though? EU succeeded in having them modify the “Whois” feature, if I’m not mistaking.

  4. The chance of ICANN being able to push through adding restrictions on trade (if that is even legal in California) rather than removing any that already are there in the contracts is essentially nil.

    What ICANN should be doing instead is justifying their continued existence in the light of them doing roughly nothing compared to normal for the last 2 years whilst paying their CEO a $1 million salary – from money collected from registries, registrars and registrants – which is simply obscene for what is supposed to be an organisation with the primary purpose of maintain a couple of text file lists !

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