debate Cartelisation by leading Domain drop catching Companies - will ICANN ever wake up?

[krishmk]

As you all know the market for drop catching is clearly driven by handful of leading companies giving no chance for a normal domainer to register domains of his choice. Their business clearly injures end domain users by spiking prices and restricting supply of the expired domains to the general public.

Ain't this against the Anti-cartel law or the Anti-Competition law?

Will FTC or ICANN ever try to regulate this unethical/unlawful business practice?
Will there be any change in the domain drop timings and the number of queries one Entity can make to the Registry giving fair opportunity to every one?

 

[jmcc]

As you all know the market for drop catching is clearly driven by handful of leading companies giving no chance for a normal domainer to register domains of his choice. Their business clearly injures end domain users by spiking prices and restricting supply of the expired domains to the general public.

The dropcatching market in the gTLDs is dominated by a few companies but over 2 million .COM domain names alone are deleted each month. Many of these are never reregistered. The costs of setting up as a successful dropcatcher are hight. It generally involves becoming an ICANN registrar or at least acquiring a few. One of the main dropcatchers has over 100 registrars. Creating these and paying the fees to ICANN is a substantial part of doing business.

Ain't this against the Anti-cartel law or the Anti-Competition law?

This is not a legal opinion but it isn't anti-competitive because anyone is free to start their own drop catching operation. It isn't a cartel as such because the dropcatchers are competing with each other to acquire the domain names rather than deciding which one of them should get the domain names.

Will FTC or ICANN ever try to regulate this unethical/unlawful business practice?

How is it unlawful?

The circumvention of the ICANN gTLD life cycle deletion process is a far worse thing. This is where registrars move expired domain names to an auction site rather than letting them delete normally.

Will there be any change in the domain drop timings and the number of queries one Entity can make to the Registry giving fair opportunity to every one?

Probably not because individual registrants have very little say in ICANN even though it is meant to represent all stakeholders.

Regards...jmcc

 

[tonyk2000]

giving no chance for a normal domainer

Why would anybody, icann including, care about domainers?

 

[jmcc]

Anyone can also sell Oil, @jmcc, You have to compete with OPEC cartel composed of
7 oil-producing nations pay a lot of duties, regulatory fees etc.. burden start cumbersome

The domain name business is even more complicated. It consists of registries, registrars, resellers and users. With the rise of the ccTLDs, many of the larger webhosters have become resellers for the larger registrars. It is financially more efficient and it doesn't involve the hassle of running a registrar.

DropCatch OPEC Cartel(army 1000 registrars)
Snapnames/NameJet is CA, US, MX.. (#2)

Each registar gets a set of connections to the registry. The more connections, the better the chance they have of dropcatching a deleted domain name. It is a business where milliseconds matter and the ordinary domainer going through their ISP would not be likely to beat an army of hundreds of dropcatch registrars after the same domain name.

Curious as to how much of backorder market
DC and Web control in the backorder sector..
I believe these non-retail registrars are sham;
seperate them; one other; Gamed the system..

The industry considers the rules to be guidelines rather than regulations.

Regards...jmcc

 

[CraigD]

Should have never allowed it to get this far

DropCatch industry is like “Cartel” 100% Agree

Samer

Whatever the ethics are, I was just pointing out that it's not 'unlawful' as OP stated.

Perhaps these services need to be scrutinised and changes introduced across the industry.

 

[CraigD]

I'm always scratching my head on why registrars are allowed to keep expired domains to themselves / auction them off. It's disallowed in many, if not all, ccTLDs but I guess com/net/org are no man's land?

I would speculate that's because most ccTLD's are under tighter control for reasons of trust.
In Australia for instance, the owner of the .com.au is required to be commercially trading or own trademark.

 

[CraigD]

As you all know the market for drop catching is clearly driven by handful of leading companies giving no chance for a normal domainer to register domains of his choice. Their business clearly injures end domain users by spiking prices and restricting supply of the expired domains to the general public.

Ain't this against the anti-cartel law or the Anti-Competition law?

Will FTC or ICANN ever try to regulate this unethical/unlawful business practice?
Will there be any change in the domain drop timings and the number of queries one Entity can make to the Registry giving fair opportunity to every one?

It's not 'unlawful'.

 

[blogspotter]

I think it gives fair chance to everyone who wants a dropped domain because now they can pay a fair price instead of having to do a lottery on who catches first.

 

[jmcc]

DropCatch owns thousands of these “registrar”

Only hundreds, Samer.

DropCatching industry needs major fix. imo!
i always wonder; how it got this bad? ICANN !

Regulatory capture.

Regards...jmcc

 

[jmcc]

ICANN needs to evolve change rigid rules;

From what I've seen of it, ICANN is more a reactive organisation than a proactive one. It frames the rules after events rather than to stop those events taking place.

(Godaddy owns 80% market share of domains; not backorder subsector; story fo another day

It doesn't.
Godaddy's main portfolio operation has 25.91% of the AMBIONIC (COM/NET/ORG/BIZ/INFO/MOBI/ASIA) market. Its European portfolio has 0.9% of the AMBIONIC but has substantial ccTLD market share. It also has some brand protection operations.

Is there any better way keep up with this?

It is a lot more complex now due to the morons who inflicted GDPR on the Internet. Some of the large hosting operations (Godaddy, Endurance, UI, CentralNic) have hundreds connected webhosters.

Even using registrar market share as a metric is no longer reliable because some many webhosting operations and registrars have been taken over that some groups have multiple registrars and it is not unusual to see the many of the top registrars/hosters in some country level markets being owned by the same group.

Regards...jmcc

 

[krishmk]

The dropcatching companies that use multiple registrars do that because they are competing amongst themselves for catching the best domains and are not necessarily trying to leave the domainers out of the game, so as an individual domainer that might put you in a disadvantage, but as far as the dropcatching companies are concerned they are engaged in fair competition amongst themselves which is where the law is most probably going to look at.

Welcome your thoughts and inputs shared in your post above...

Multiple Registrars competing against each other represents a healthy and competitive Market but when the majority of the Registrars are owned by 1 parent entity - is where the question of monopoly and cartelisation comes into play.

@krishmk , if you were to make a proposal to ICAAN , what would you consider to be a fair way to go about dealing with all this..

a) Limit the number of requests an entity can make to the Registry during the drop time.

b) Implement an algorithm where the Registry accepts requests from rotational Clients/Senders instead of fulfilling the pool of requests originating from the same group of Registrars owned by a single parent Company.

c) Limit the number of domains an entity can register expired domains in proportionate to the average number of expired domains being registered in the last X no. of days (similar to grace period - domain deletions)
Anything that can make the Expired domains market a fair and competitive one.

I am open for suggestions from other members as well.

 

[krishmk]

Out of the 2450 ICANN accredited Registrars, here is the breakdown of who controls the market (based on the support email id)
Over 50% market share is controlled by 1 entity

support@namebrightcom: 1252 - 51.10%
customerservice@networksolutionscom: 479 - 19.55%
tldadmin@logicboxescom: 52 - 2.12%
support@mydomain-inccom: 43
support@namecom: 20
registrar@dotmediacom: 20
service@22cn: 16
and others......

Source:
https://www.icann.org/registrar-reports/accreditation-qualified-list.html

Note: Please note that the data provided here by me is subject to detailed/manual review and may not be 100% accurate.

 

[Samer]

It's not 'unlawful'.

Should have never allowed it to get this far

DropCatch industry is like “Cartel” 100% Agree

Samer

 

[jmcc]

Always a pleasure, @jmcc. passionate this;

Thanks for quick, and courteous correction!

How did you distinguish from 1000’s they own.
they still own thousands of registrars, right?

There are only about 2,500 ICANN accredited registrars. The ownership details and contact details for the dropcatchers are typically the same. They don't sell to the public and some of them even provide the same URL for the registrar.

How did you quantify the “non-retail” snipers, owned, for the sole purpose of “DropCatch”

Most of the people trying to dropcatch are using the registries rather than individually targeting domain names. When it comes to hosters, for .COM alone, as of 01 August 2020, there are 883,202 hosters with one or more .COM domain names hosted. Of these 522,748 are one hit wonders in that they only have 1 .COM domain name hosted.The top 1,800 hosting firms (registrars and webhosters) have 90.88% of the .COM domain name market. HosterStats tracks has the hosting records for over 600 million domain names (active and deleted) and produces this kind of data each month. I was going to examine the domain name market for the second Domnomics book but people would not believe how concentrated the market is in reality. The rise of Efty and Dan.com have been impressive.

Regards...jmcc

 

[jmcc]

We aren't able to compete with them, let's call them unlawful cartel. Nice.

If it is not breaking any laws then it is not unlawful. ICANN tries to keep on the right side of the law. It may be unfair to ordinary domainers who don't own registrars but that's the business.

Regards...jmcc

 

[krishmk]

Classical case of pot calling the kettle black. If you can't beat them, join them.

Certainly not, please read my posts from the beginning. I have put forth my points on how these Companies violate the Anti trust or Competition law. Unfortunate that people like you are so innocent that you dont even understand that your right for a fair and equal opportunity is being abused by large Corporations.

I do not have any intention to compete with those Companies as my line of business is different and not of my interests.

I am raising my voice against the anti-competitive business practices, anti-cartelization and abuse of Market dominance; not for my personal gain - but for each and every one of us.

Like some of the other members stated there was a paradigm shift from "Abuse of Registrars" to "Abuse by Drop-catching Companies". I am hopeful the paradigm will one day shift from this abuse to a fair competitive market.

 

[tonyk2000]

Abuse by Drop-catching Companies

So far, the only proven case was a snapnames halvalrez saga:

https://domainnamewire.com/2010/02/16/halvarez-caused-2m-loss-to-snapnames-customers/

Other cases will no doubts appear. In a dark area of open expired or pre-release auctions (/me thinks). For there is nothing hidden that will not be disclosed, and nothing concealed that will not be known or brought out into the open (New Testament, Luke 8:17). But, it has nothing to do with dropcatching model in general, or the related rules establised by registries or icann...

 

[Samer]

For same reason domaining still exists and to some extent drop-catching is a variety of domaining. So let's ban everything altogether.

Easy there, slippery slope.

I propose solutions not “banning”

Just cap # Registrar own just for DropCatchin
ICANN is so corrupt; too much to ask; i know..
Plus there are some content with status quo.

Samer

 

[oldtimer]

I am raising my voice against the anti-competitive business practices, anti-cartelization and abuse of Market dominance; not for my personal gain - but for each and every one of us.

The dropcatching companies that use multiple registrars do that because they are competing amongst themselves for catching the best domains and are not necessarily trying to leave the domainers out of the game, so as an individual domainer that might put you in a disadvantage, but as far as the dropcatching companies are concerned they are engaged in fair competition amongst themselves which is where the law is most probably going to look at.

One thing that might be even more important than what the dropcatchers are doing and probably needs to be scrutinized further is the fact that some registrars don't even allow some domains to go through the drop process and just keep them in limbo for many months.

The fact that some registrars are in direct competition with their customers for their domains and don't give them ample time to renew them before they put them on auction (or keep them in limbo as already mentioned) should also be of concerned too.

So it's not just the dropcatching part that might need some changes it's the whole drop process that needs to be made uniform across the Industry.

@krishmk , if you were to make a proposal to ICAAN , what would you consider to be a fair way to go about dealing with all this.

IMO

 

[tonyk2000]

The problem is any and all drop process changes they may implement will not help individual domainer in any aspect. It is so obvious... Similar applies to UDRP revision, for example, It would worsen the situation. So it is better not to touch the things.

 

[oldtimer]

Some registrars (and registries) are amassing huge portfolios for themselves form the expired domains either directly or through their subsidiaries. Now if all domains are allowed to go through the complete drop process and if they do this in a passive way that does not put them in direct competition with their customers then it might be okay, but otherwise it means that ICAAN is being laxed about protecting the registrants from unfair competition by registrars (or registries) which might be an indication of some insider dealings being made at ICANN that are against the interest of the registrants.

Add to that the fact that registrars and registries are selling the info for domain searches made on their website or through the whois lookups which deprives a registrant (like a small business) of being able to register a domain that they might have found to be available, but then they notice that it's gone when they go back to register it in a few days after they have made their final choice from the domains that they had shortlisted.

The registrants' rights need to be protected against unfair practices and insider dealings across the board.

IMO

 

[jmcc]

So far, the only proven case was a snapnames halvalrez saga:

That was only one incident. The reality is that some registrars were actively registering the entire day's deletions for some gTLDs. It was far worse than most people realise. The targeting of one gTLD (.ORG) put a significant strain on the registry backend. Between 2005 and 2008, there were over one billion (1,000,000,000) .COM domain names that were registered and deleted in the Add Grace Period. It was extremely serious abuse of a feature that had been created to help registrars. Basically, consumers were frozen out of the market for expiring domain names. Halvarez was only small fry. The actual numbers are in the Domnomics book in the free section on Amazon. The real problem was the subversion of the registrar system and ICANN's lack of action until Dell took out a major domain taster operation and Google decided not to monetise domain names in AGP.

ICANN introduced a kind of restocking fee for the AGP registrations that added a cost to the transaction. This meant that the registrars could no longer domain tast for free. Some of the registrars then focused on small sets of "good" domain names. The circumvention of the natural domain name life cycle (where a domain name goes through the deletion process) by moving expired domain names to auction partner sites accelerated after the introduction of the ICANN transaction fee and Google demoting PPC-only pages in its search engine index.

The registry constituency is one of the most powerful groups in ICANN. ICANN depends on the registrars and domain name fees for its commercial existence. Most domainers have never even attended an ICANN meeting. There is an At-Large constituency that is meant to represent the ordinary registrants and users but for some in this constituency, domaining is a dirty word. There are other constituencies dealing with Intellectual Property, Civil Society (non-profits and do-gooders), and govermental/national interests. But there's none for domainers. In some respects, domainers are like sheep to be sheared to both ICANN and the registrars.

Regards...jmcc

 

[jmcc]

Multiple Registrars competing against each other represents a healthy and competitive Market but when the majority of the Registrars are owned by 1 parent entity - is where the question of monopoly and cartelisation comes into play.

This is one of the metrics that the US Department of Justice uses when examining market concentration:

https://www.justice.gov/atr/herfindahl-hirschman-index

Basically, these owned registrars even when combined as a single entity don't have enough market share to be a problem. They are not targeting all dropping domain names. This means that they are only competing with other registrars for a small number of domain names each day. Now if a set of these registrars were registering over 50% of each day's deleted domain names, it might be a problem but the low numbers keep it off the DoJ's radar when it comes to market concentration and competition. Cartels are something quite different. These dropcatch registrar groups are not colluding with each other. Each group is competing with each other.

Regards...jmcc

 

[krishmk]

How they are supposed to determine what a valuable domain is? Their actions are based on the law exclusively. Since they are in U.S., U.S. law matters. No part of U.S. law says what a valuable domain is, and why is it different from an "ordinary" domain.

Agreed most likely they may not be knowledgeable about domain values. If such a situation arises - the Court can always seek the professional help of a competent and experienced Domain Appraiser.

 

[Samer]

DropCatch owns thousands of these “registrar”

For the sole purpose of DropCatching!
Theyre not even “retail registrars”? Why allow

Unfair 5:1 Registrar adv. to rest of competition;
they usually get their target!
Why takes forever scroll down list DC registr;
After #2 Snapnames; No one else come close

DropCatching industry needs major fix. imo!
i always wonder; how it got this bad? ICANN !