.mobi I Feel Cheated - Considering Legal Action Against SEDO

[DomainTalker]

I feel cheated...


At the designated auction close time for SEDO 3 auction, I was formally notified by Sedo, by email, that 2 auctions I was bidding on had CLOSED - and it said: 'You're the WINNING BIDDER', in each case.


I had won 2 excellent domains.


I double-checked....I visited the auction pages for each name (no evidence of tech difficulties). They each said: 'This auction is now closed', and that 'You (me) are the 'Winning bidder' - and showing my successful bid amount.


I treble-checked.....I visited the 'Transfers' page in my Sedo Account (no evidence of tech difficulties)....And, sure enough, both names were listed there - with the bid amount beside each name - and the notification of 'Transfer in Progress'...this page also serves as the invoice for each domain's payment.


I had bid - the auctions were now closed - I had written, formal, confirmation that the auctions were closed, and that I was the winner in each case - and I had confirmation on the auction pages, themselves - plus a Sedo entry into the 'Transfers' page in my account at SEDO that serves as the invoice for each sale, and noting they were 'Transfers in Progress'....


And, all these double & treble checks I did were done on the Sedo website AFTER I received the win-confirmation emails from Sedo - AND there was NO sign of any 'Tech problems', as I visited the auction pages in search of the confirmation, and visited Sedo's Transfers' page to also confirm the transaction...


There is no doubt....It was all agreed - Sedo and I had a deal.


At that moment, a binding contract was formed - between the parties (me & Sedo/mTLD).


Having confirmed I had won these 2 names, I immediately dropped out of bidding for the other names I was bidding for.....I was happy with what I'd won.


It was 4.15am in Sydney........I immediately exited SEDO, and went to bed.


It was only this morning - Sydney time - that I woke to find emails from Sedo saying I had been 'outbid' for my two names...!!...WTF....??!!


....Oh, and also an email saying the auction had been extended, timed at being sent to me 1hr 50mins AFTER the auctions had CLOSED - and after I had been confirmed the winner of the names - and had long since exited the auction...!!!!!


Now, ladies & gentlemen...


I don't know about you, but, this is unethical, unconscionable business practice, imo....Its sharp practice, its non-transparent, and, I believe, illegal auction practice.


Auction contracts are formed when a bid is made and it is accepted by the auctioneer....From that moment, there is a legal, binding contract between the parties.


If the auctioneer had technical problems that prevented bids at the last moment - then, they should NOT have formally accepted the current bid/offer...Once they DO accept the offer formally - it is a contract at that price...


Can you imagine Sedo's attitude to me, if, after I was confirmed as the winning bidder, I turned around and said: 'Um, sorry....my computer crashed, so I don't believe I have a contract with you to pay for the name I won....'....!!??....They'd laugh at me...And - quite rightly - remind me we had a BINDING CONTRACT...


Their formal acceptances also cost me the chance to bid further on those two domains (I was told the auction was closed)...I reasonably assumed it was all over, I'd won, and I left the arena, shut down my computer, exited Sedo altogether.

AND, their formal acceptances persuaded me to drop out of other auctions I was bidding on - thereby costing me a chance at those names...


And...to be informed 1hr 50 mins AFTER THEY HAD CLOSED THEM, that the auctions were on again.....is....simply...breathtaking....And, reeks of lack of integrity, in the name of greed...


These are valuable domains....with serious potential value..


I feel I have been cheated...

.

 

[accent]

The cheapest solution for Sedo - and the one that would bring back most of the lost goodwill - imo, is:


(i) Honour the Contract with the original confirmed auction winners - and award them the domains.

(ii) Pay .mobi the difference in price (if any) between the bid the original winners were accepted at, and the final price after the false 'extended' auction.

If rational heads prevail I expect this is what will happen, at least for those domains for which invoices were sent out.

The difference between the two "auction ends" is less than a million $. I think a good arguement can be made that:
a. The second auction has no legal existance because the domains were already sold via the contracts/invoices sent to the first winners.
b. The second auction provides a reasonable estimate of the final sales prices the domains would have achieved if there had not been a wardrobe equipment malfunction.
c. The cost of lawsuits would be far greater any other way. I suspect a judge would rule that the second auctions were invalid and so losses to the second auction winners would be minimal (you cannot lose what you never legally had). And second auction winners (and those who were locked out the first round, but they probably have no grounds) would be the only ones who would not like this arrangement.

Sure wish I could know what the Sedo and Mtld folks are saying just now, I bet those guys are having a rough day. As a bystander, this is very interesting.

 

[domain_trader]

Has anyone read the terms and conditions yet.

This is the first thing that everyone should be looking at. Those terms and conditions are legally binding, so until these are examined, this discussion is just a lot of venting of hot air with no legal substance (albeit understandable venting).

i think we should be looking to ICAAN for clarification on this.

I think you would find that ICANN would stay well out of this. They have no official interest in the reseller's market and they generally will only get involved in disputes when they concern a trade mark infringement.

what's the next step?

As you say, we need to look carefully at the terms and conditions. Here is the relevant section (I think) taken from http://mtld.mobi/domain/premium/auction:

"5. Bids and Conduct of Auction A bid made by a Participant is a binding offer to purchase the Authorization Code at the stated bid price. The Auction shall be conducted by the Auction Manager in accordance with terms and conditions determined by the Auction Manager. In the event of any dispute between bidders with respect to the conduct of the Auction, the Auction Manager shall have sole and final discretion to determine the winning bidder. Subject to the terms and conditions set forth in this Auction Agreement, including all documents incorporated herein, the winning bidder shall be obligated to complete the transaction and to pay the amount of the winning bid as provided herein. mTLD reserves the right in its sole discretion to reject a bid from any Participant for any reason."

This basically says that Sedo has the right to do whatever it wants. On that basis, you could argue that a participant in the auction would reasonably expect that the auction would be run on a fair basis as per typical auction rules (however these are normally understood), and that Sedo's decision to extend the auction without sufficient notification was acting outside what might be reasonably expected. Unless there are more specific terms and conditions than these, Sedo could be in trouble here.

The other relevant section is this:

"12. Dispute Resolution Any difference, controversy or claim (whether based on contract, tort, statute, or any other legal basis) arising out of or relating to this Auction Agreement (including, without limitation, the formation, existence, validity, enforceability, performance, expiration, or termination of this Auction Agreement or the arbitration provision herein) or the products and services supplied by either party to this Auction Agreement and includes an application for provisional or protective relief shall be finally, confidentially, and individually resolved by arbitration by three (3) arbitrators in accordance with the Rules of Arbitration then in effect of the International Court of Arbitration of the International Chamber of Commerce, or its successor; provided that this Auction Agreement shall control if there is a conflict between it and the Rules. The seat of the arbitration shall be Dublin, Ireland. The language of the arbitration shall be English, and all documentation, testimony, or other materials submitted to the arbitrators shall be in the English language."

So any legal action would need to go through the International Court of Arbitration of the International Chamber of Commerce. Their rules and procedures are outlined here: http://www.jurisint.org/doc/html/reg/en/2003/2003jiregen59.html

You could consider going through the civil courts, but a civil court would probably expect that you tried the International Court first as per the agreement.

I'm not a lawyer by the way, so don't take any of this as professional legal advice - just my understanding of the legality of the situation and the proper procedure for challenging the auction result.

 

[mo_dork]

excelent post.

not sure about ICAAN's role. they say this on their site-

ICANN is responsible for accrediting the domain name registrars. "Accredit" means to identify and set minimum standards for the performance of registration functions, to recognize persons or entities meeting those standards, and to enter into an accreditation agreement that sets forth the rules and procedures applicable to the provision of Registrar Services.

ICANN's role is very limited, and it is not responsible for many issues associated with the Internet, such as financial transactions, Internet content control, spam (unsolicited commercial email), Internet gambling, or data protection and privacy.

but then again on the dot-
dotMobi (the informal name of mTLD Top Level Domain, Ltd.) was appointed by ICANN as the official global registry for the .mobi top level domain.

also on the dotMobi site-
Q: Why has dotMobi chosen to allocate Premium Names by auction and RFP?

A: Premium Names are valuable names within the domain space. An auction process allows a Premium Name to go to the highest bidder; however, the purpose of an RFP process is to level the playing field, to ensure content-rich dotMobi sites and to ensure the delivery of new products and services to the mobile community. Both allocation processes have ICANN approval.

'the allocation process has ICAAN approval'
which i guess means ICAAN probably set the rules?

then there are al the companies that back dotMobi-
investors include Ericsson, Google, GSM Association, Hutchison, Microsoft, Nokia, Orascom Telecom, Samsung Electronics, Syniverse, T-Mobile, Telefónica Móviles, TIM, Visa and Vodafone.

i wonder if any of these entities were on the winning or losing end of any auctions?

 

[DomainTalker]

but the longer we continue to get carried away with all this, the longer it'll be before the dust settles and things can get sorted out in something more resembling a rational way.

Well, yes, people feel strongly about this - but, I assure you, several of us are going about this in a very rational way - privately.

I'm sure Sedo will hope that it just goes away....It won't.


Sedo better be under NO illusion that there are some very unhappy people over this - and these people are not lightweights....And, they are VERY likely to be serious enough to fight this...And fight hard.

If Sedo thinks they are too big - Or, we are too weak - then they need to know they are wrong.


Premium domains are serious business....We must have an orderly market....Some of us have been greatly disadvantaged....And Sedo not insignificantly enriched...by this fiasco....NO ONE, in my book, takes advantage of people that act in good faith, and cause them loss...Nor, with playing fast 'n loose with proper business processes to the detriment of honest people, imo.


I strongly suggest that Sedo move to work something acceptable out with each of us before it gets to that...And, quickly.

.

 

[dalem]

work out something Acceptable? I want my names that I bid on and won!

 

[DomainTalker]

Btw....Sill not a word - or even acknowledgement - of my emails from Sedo....


Do they really think this will go away if they just ignore it?

.

work out something Acceptable? I want my names that I bid on and won!

Exactly what I want, dalem....And, at the agreed price of my accepted bids.

.

 

[Dave_Z]

While dotMobi's site does say you agree to their end-user agreement in joining
the online auction, it also says this:

http://mtld.mobi/domain/premium/auction

Companies and individuals will be able to bid on the premium names offered by dotMobi and Sedo during these three auctions. The auction rules will follow Sedo's standard Terms and Conditions.

If you joined that auction via Sedo, read the link below:

http://www.sedo.com/about/policy.php?page=terms_of_use_us&tracked=&partnerid=&language=us

Based on Sedo's supposedly reply domain_trader posted here, this might be it:

If the Auction Period is cancelled, any contractual relationship between the Seller and the highest bidder and/or the person who made the last offer before the Auction Period that may have existed will cease.

ICANN has an agreement with dotMobi. The latter, in turn, can contract their
ICANN terms with Sedo, yet ICANN and Sedo have no contractual relationship
with one another governing this specific instance.

IANALE. Talk to an attorney for truly qualified "advice".

 

[accent]

I watched ICANN('t) during the Registerfly fiasco. They are all but worthless.

If the Auction Period is cancelled, any contractual relationship between the Seller and the highest bidder and/or the person who made the last offer before the Auction Period that may have existed will cease.

Well, that means the earlier BIDS are canceled and all starts again from Zero.
So I would argue that the auction was not "canceled" under that clause.

 

[hanogl]

As a bidder in the auction, where exactly did you agree with the mTLD TOS? As far as I can remember you only had a check box to indicate you accepted Sedo's TOS, but you never had to accept the mobi TOS.
Anyone knows more about that?

 

[Dave_Z]

So I would argue that the auction was not "canceled" under that clause.

Well, they can argue this part above the one I quoted:

Sedo reserves the right to cancel an Auction Period at any time

Of course, you could argue the part after that. Chances are, both of you will
be going around in circles and/or stand pat.

As a bidder in the auction, where exactly did you agree with the mTLD TOS? As far as I can remember you only had a check box to indicate you accepted Sedo's TOS, but you never had to accept the mobi TOS.
Anyone knows more about that?

See my previous post.

 

[domain_trader]

If the Auction Period is cancelled, any contractual relationship between the Seller and the highest bidder and/or the person who made the last offer before the Auction Period that may have existed will cease.

Yes, this is a key clause. But it could be contested on the grounds that the cancellation in this case was not legitimate. It says prior to this statement:

"Sedo reserves the right to cancel an Auction Period at any time, if the offered Domain or Web Project infringes the intellectual property rights or other rights of a third party."

So in this case, where IP was not infringed, the grounds for cancelling the auction did not exist. Also, the auction was technically extended rather than cancelled as accentnepal points out, so again, SEDO is on shakey ground here.

Here's another part of the agreement that is relevant:

"Sedo in no way guarantees or further warrants that the web page on which bids can be placed (“Bidding Page”) during the Auction Period is permanently accessible. If a Bidding Page is not accessible, the Seller may not, in the future refer to a potentially higher bid during this time period as a mechanism for not following through with a sale. Furthermore, a potential bidder may not argue, for the same purposes, that he would have been the highest bidder the Domain up for Auction if the webpage would have been available."

This is stating that any technical difficulty with the site during the auction is not grounds for disputing the successful bid. In other words, even if there is a technical problem, the winning bid holds.

The only issue is whether SEDO has the right to extend the auction arbitrarily. Maybe someone can hunt down if a section of the terms and conditions exists somewhere that addresses this, as it is the key to determining whether SEDO has any credible defence.

But based on what I've read of their terms and conditions so far, SEDO I think would be in strife if they are contested in this case. They would need O.J.s lawyer to get out of this one.

 

[nrmillions]

wrong thread

 

[domain_trader]

nrmillions, you are confused here with MusicDotMobi's case (other thread). DomainTalker (who started this thread) claims that he didn't know the auction had reconvened. After he was advised of his winning bid from the 'first auction' he shut down his computer and went to sleep, only to find out later that they had continued the auction.

I also would not place too much faith in the robustness of Sedo's terms and conditions. They look rather 'loose' to my eye. They're not even specifically written for these live auctions - only for their normal online auctioning system.

The fact of the matter is that Sedo did not expect the crash to their servers to happen. They panicked, made a quick decision to continue the bidding, and are only hoping that they will be covered by their terms and conditions (strategically, that is what they need to say to discourage lawsuits!). Their terms and conditions were not prepared with this type of situation in mind. Hell, Sedo weren't even technically prepared for the possibility of a server crash!
____________________
POSTSCRIPT - no worries nrmillions, it was an easy thing to do to mix up the two threads.

 

[DomainTalker]

"Sedo in no way guarantees or further warrants that the web page on which bids can be placed (“Bidding Page”) during the Auction Period is permanently accessible. If a Bidding Page is not accessible, the Seller may not, in the future refer to a potentially higher bid during this time period as a mechanism for not following through with a sale. Furthermore, a potential bidder may not argue, for the same purposes, that he would have been the highest bidder the Domain up for Auction if the webpage would have been available."

This is stating that any technical difficulty with the site during the auction is not grounds for disputing the successful bid. In other words, even if there is a technical problem, the winning bid holds.

Very interesting...

DomainTalker (who started this thread) claims that he didn't know the auction had reconvened. After he was advised of his winning bid from the 'first auction' he shut down his computer and went to sleep, only to find out later that they had continued the auction.

Absolutely correct....It was after 4.15am, my time....I'd won....It was confirmed...I was happy.....and went to bed.....It was hours later, the next day, that I returned to the computer....to find....well....it was all over....and my domains had been hijacked, taken away - and auctioned off to someone else....


All this analysis of the situation is fantastic, guys...It'll be a big help....Thank you....

.

 

[italiandragon]

A couple of months ago, I had been in touch with the Sedo CEO , Mr Schumacher, who to my complains about a non paying bidder, replied to me:

"Here at Sedo , we take non paying bidders very seriously..."

I`d like to know if this apply to them. People who won the auction , have all the rights to claim the names at their winning prices, otherwise the less that can happen is that SEDO will lose immediately credibility.

 

[mo_dork]

i sent a complaint to sedo right after i found out about this incident, i haven't received any reply to date. i am thinking now i should write a more specific email saying that i contest the decision, so its in writing and they know to not proceed with any further transfer of the domain to the second purchaser.

at the last auction i recieved an email from someone who represents key accounts, so may send to him. or does anyone have a more appropriate address to send to?

has there been any word from sedo or dotmobi on this issue yet?
i don't believe there has been, which probably means their lawyers need more time, meaning their TOS is not fully protecting them.

how much is sedo worth?
maybe dontmobi will end up owning them.

 

[TheBaldOne]

From the looks of it Sedo are going to be sued in the States (ouch - big time).

At the moment from the most recent posts it looks like Sedo did not even try to telephone winning bidders to alert them to the fact that the auction was being extended. In this day and age I think this alone will cause considerable irritation to any trial judge hearing that Sedo had posted notices, sent emails, wrote on blogs, etc., without even confirming that the supposed people who they were meant to be contacting were not telephoned directly (Sedo has every bidders telephone number).

Sedo would need a miraacle to come through from this.

 

[dag]

People who won the auction , have all the rights to claim the names at their winning prices, otherwise the less that can happen is that SEDO will lose immediately credibility.

I think this is the part that is still uncertain -- does a computer glitch give them "all the rights to claim the names"?

 

[mo_dork]

Its not just the computer glitch. it is the human decision to restart the auction without informing key bidders.

 

[creature]

Its not just the computer glitch. it is the human decision to restart the auction without informing key bidders.

Yes, I can't understand why they didn't verify that the first round winners were 100% aware of the second round.