.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...

.

 

[dag]

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

I agree they screwed that part up -- but that still doesn't verify that the first "winners" have "all the rights to claim the names."

 

[domain_trader]

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

...yes, and also in the meantime to have sent notifications to those who had technically won the 'first auction' (even if that process was automated). I'd say that gives them sufficient grounds to claim those names.

 

[mo_dork]

new reply from sedo-

There was an error with our servers and the response from Management is as follows:

Due to high popularity and traffic volume, our web servers experienced site
resolution issues at the end of the auction. Specifically, certified user
offers were placed and recorded in our database, but were not being
displayed on the auction site. This led to a situation where auctions were
marked as closed when in actuality the auctions were still active. Our
system sent automated emails in error to recipients notifying them of their
successful bid and introduction to the transfer service. Please disregard
this email notification. The transfer and corresponding documentation have
been cancelled from our system.

In light of the situation and out of fairness to all of our valued Sedo
members, the .mobi auction was extended for a reasonable time to allow that all certified user offers were restored and the auction ran its course.

We sincerely apologize for any inconvenience this may have caused you.

Unfortunately I cannot reverse the completed auction.

 

[dalem]

I have just recieved the same automated letter as above. This is bull@#$$

 

[mo_dork]

yeah, but like they said. its the response from management, not necessarilly the response from a judge.

i guess that is where we are headed.

 

[tophatter]

REDO SEDO Mobi Auction

Some may have fire in their eyes after reading the title of my thread.
I got screwed,had a meeting 5 minutes before auction end(extended) couldn't bid anymore.I blocked out time for this auction and as a result was unable to up my bid so was outbid in the end by $100. for the only name I wanted.Would the $$$ result for the name I bid on been different ,Yes ,however would I have won ??not sure...
Who thinks sedo should redo ????
I'm not saying it's a good idea I'm just tossing it out there to hear your opinions on a Friday evening.

Regards, Tophatter

 

[dalem]

They should have at least informed all bidding parties by phone and set another date to do the auction. Now its just a complete mess! I think the only thing to do from sedo's point of view is award the original winners i.e. the first and only auction in my eyes the domain names. Sedo has to take this on the chin, admit vault and move on.

 

[Alan Glennon]

At this point, Sedo would be quite unwise to change the results of the auction. If they did change the outcome, for every single angry customer now, there would be ten more. It seems that Sedo's best course is to move forward like everything worked out fine, and consider legal challenges as they arise. As necessary, the courts will work it out -- and Sedo (and/or mtld's) liability beyond the actual auction pricing appears quite low. That is, it would be quite hard to prove real loss on a product (domain) that previously had not been in use.

Just my opinion. Hope everything works out okay for everyone.

I think the only thing to do from sedo's point of view is award the original winners i.e. the first and only auction in my eyes the domain names.

 

[DomainTalker]

new reply from sedo-

There was an error with our servers and the response from Management is as follows:

Due to high popularity and traffic volume, our web servers experienced site
resolution issues at the end of the auction. Specifically, certified user
offers were placed and recorded in our database, but were not being
displayed on the auction site. This led to a situation where auctions were
marked as closed when in actuality the auctions were still active. Our
system sent automated emails in error to recipients notifying them of their
successful bid and introduction to the transfer service. Please disregard
this email notification. The transfer and corresponding documentation have
been cancelled from our system.

In light of the situation and out of fairness to all of our valued Sedo
members, the .mobi auction was extended for a reasonable time to allow that all certified user offers were restored and the auction ran its course.

We sincerely apologize for any inconvenience this may have caused you.

Unfortunately I cannot reverse the completed auction.

So....they admit it was NOT a computer system CRASH - just a 'site resolution' issue....??...Well, that's one thing cleared up...

So, Sedo are saying, in effect, that their TOS says they can extend auctions if there are bids in the final minutes - and that, since their computers registered these bids - but didn't appear to register them - then, the late bids are valid, and allows the 'extension' of the auctions......And the fact the winning bid confirmations were sent out by mistake somehow doesn't matter....!!


Cute....But, won't fly.....I - as the original winner - cannot tell the difference between an acceptance of my bid-offer that is a 'mistake' - and, an auction page that says 'Auction Closed - You are the Winner', that is also a 'mistake' - and an entry in Sedo's own 'Transfers' that contains an invoice for the sale to me, that is a 'mistake........And the real thing....!!

In short, a reasonable person cannot distinguish between a 'pretend' acceptance of a bid by Sedo - and an identical 'genuine' acceptance of a bid by Sedo.

....A reasonable person has to conclude, imo, that a Contract was formed when Sedo offered bidders an acceptance - as they did to the winners of the original auction....Saying, later: 'Ooops, sorry....didn't mean to sign that deal....'...has no standing...


...The test is 'Reasonable Conclusion'...ie 'Having seen & received all the confirmations of a sale, and seen confirmation of a concluded auction, would a reasonable person conclude that an auction had ended, and that they had been the winner?' Obviously, the answer is 'Yes'.

I was also denied the chance to bid in the 'extended' 'auction' - because I accepted Sedo's confirmations, and closed my computer until the next day.

Sedo (and/or mtld's) liability beyond the actual auction pricing appears quite low. That is, it would be quite hard to prove real loss on a product (domain) that previously had not been in use.

Here's how Sedo should extricate itself from the situation, imo:


If Sedo were to award the domains to the original winners, their liability (say, to the 'new' winners) could be minimal - because the 'new' winners would find it difficult to establish a loss to themselves on a product (domain) that had no established value beyond what the market (via auction) said the value was...

...and that value is established by the PRIOR auction Contract between Sedo, and the original winners...


It should not be hard to establish in a court that a PRIOR Contract existed between Sedo, and the original winners:

Offer (bid) + Acceptance = Binding Contract (therefore, any subsequent activity would be invalid).


Once that PRIOR Contract had been established - subsequent 'auctions' on those domains were invalid....The 'new' domain winners are owed nothing, 'cos they never owned the domains...


So....Sedo's only financial liability - if they gave the domains to the original winners - would likely be to mTLD for the (apparent) higher 'prices'....But, there would be no liability there, either, because the 'higher prices' were invalid, in the first place.


So....Sedo can hand the domains back to the original winners , imo - do the right thing - restore credibility - and keep their reputation intact......at minimal financial penalty...


Or....they can be dragged to court - and risk the serious costs of the process.


...Meantime ALL those domains sold at auction would be 'IN DISPUTE' - maybe for MONTHS....and transfers cannot take place - nor can Sedo/mTLD get their money...


The commercial logic is inescapable, imo...


All up....If I was Sedo.....I'd save my reputation - at minimal cost - and award those domains to the original winners, immediately.

.

 

[Alan Glennon]

I think Sedo will take this option. Though I doubt they will consider it being "dragged". This is a case where all sides come from positions of reasonable merit, and, in such cases, formal legal proceedings can be quite helpful. Particularly, because, at the end, there will be no ambiguity.

Or....they can be dragged to court - and risk the serious costs of the process.

 

[dalem]

well said domaintalker agree with your statements entirely

 

[accent]

That message from Sedo seems to say that they are willing to go to court with the original winners. They seem to think they can pocket the increased proceeds from the second session with little difficulty.

I don't think they understand American courts, and the expense involved whenever they are involved. That could easily cost more than the difference between the prices realized, drag their name through the mud, and cause release of a lot of information that they do not want public.

Perhaps this is a negotating position.

The loser will be Mobi, as development of the contested domains cannot begin until the ownership is resolved, and that could easily be SEVERAL YEARS. And I wonder if Mtld will shop for a new auction site.

Short term greed can mean long term loss. Sedo had better think this through more carefully.

 

[Alan Glennon]

I would suspect Sedo has professional liability insurance for such matters, and the prospect of going to court is not particularly daunting for them. All sides appear to have reasonable positions, and the legal system is an appropriate forum for resolving such issues.

I don't think they understand American courts, and the expense involved whenever they are involved. That could easily cost more than the difference between the prices realized, drag their name through the mud, and cause release of a lot of information that they do not want public.

The loser will be Mobi, as development of the contested domains cannot begin until the ownership is resolved, and that could easily be SEVERAL YEARS. And I wonder if Mtld will shop for a new auction site.

As far as transfer of ownership, I think it would be difficult to argue for injunctive relief on intent to use (I'll have to ponder that a little bit more though). UDRP appears non-applicable since it addresses exclusively mark infringement and bad faith registrations. In short, my first impression is that I doubt there will be any delay as long as the high bidders pay.

DotMobi should seek an alternative marketplace for future sales.

 

[Dave_Z]

Due to high popularity and traffic volume, our web servers experienced site
resolution issues at the end of the auction. Specifically, certified user
offers were placed and recorded in our database, but were not being
displayed on the auction site. This led to a situation where auctions were
marked as closed when in actuality the auctions were still active. Our
system sent automated emails in error to recipients notifying them of their
successful bid and introduction to the transfer service. Please disregard
this email notification. The transfer and corresponding documentation have
been cancelled from our system.

Interesting. Essentially they said the auction didn't conclude until much later,
and their systems wrongly notified some of you winning or so.

If this hits court and Sedo demonstrates in good faith what happened indeed
occurred, then I'm sorry to say all those confirmations you got in your PCs or
so will likely mean nothing. Sedo's contract you all agreed to (check box and
all) includes disclaimers of warranty and all that.

Big ifs, of course. But it'll be your burden to show they're "lying", just to put it
bluntly.

And no, they're not going to retrieve those .mobis from their winners. It's sure
nice if they can somehow make up for this through some other way, but they
aren't required to.

Again, JMO. I have no problem being proven wrong if someone forces this into
legal proceedings and they win their case, but I ain't optimistic.

 

[dag]

The loser will be Mobi, as development of the contested domains cannot begin until the ownership is resolved, and that could easily be SEVERAL YEARS.

Won't happen -- if no one's stopping the domains from being transferring right now, I'm sure that the final winning bidders are anxious to gain possession and are paying as quickly as possible to make that happen (and really, who could blame them?).

It would take a court ruling at that point to take the domains out of the new owners' hands.

Frankly, and this isn't intended to take sides, but I have a strong feeling that challengers who consider themselves the "first" winners would lose in court. You'll just end up still without the domains AND out a lot of money lost in legal expenses. But that's just my opinion.

 

[accent]

I would suspect Sedo has professional liability insurance for such matters...

Maybe, but if they have a big case and continue with auctions the cost of insurance will go way up I bet. Insurance companies do not like to give away money. Attorneys, however, are often very aggressive with other people's money.

..... As far as transfer of ownership, I think it would be difficult to argue for injunctive relief on intent to use (I'll have to ponder that a little bit more though).

Would you develop a website on a disputed domain? And would you pay for a domain that is heading to court? The name is "tainted" in a way that was not apparent at the time of the auction - I bet most bidders are going to want to withhold payment until this is resolved.

 

[DomainTalker]

If this hits court and Sedo demonstrates in good faith what happened indeed
occurred, then I'm sorry to say all those confirmations you got in your PCs or
so will likely mean nothing. Sedo's contract you all agreed to (check box and
all) includes disclaimers of warranty and all that.

I'm sorry, Dave, but I don't agree...


Sedo is responsible for its own systems - and what they do....For Sedo to say later....'Ooops....sorry....we didn't mean to sign that Contract...' (ie 'Our hand signed the Contract without our brain meaning to do it' - Or, in this case, trying to say 'Our computers Contracted us without our permission').....is of no standing.

Sedo had a duty of care to its bidders to ensure that there would be no computer glitches that affected bidders Contracts....And, if there was, then they have failed that duty of care, and are responsible....

Good faith has nothing to do with it....I bid in good faith - and absented myself from Sedo website when I accepted (in good faith) their acceptance of my winning bid....They don't seem to value 'good faith' - and, imo, would be most unwise to rely upon that defence...


Had the situation been the other way around, Sedo would have quoted their own TOS, and said that the Contract with the high bidder is binding - and you would have to pay.


The original winners are entitled to the names they won - and have a written binding Contract with Sedo for them - and that's what I want.


_______________________________________


On the question of money...


There is the question, for the original winners, of Loss of the opportunity for potential future value of a Premium domain (where the original winning bid price was often shown later that someone else would pay much more for the same domain....NOW....That is a commercial opportunity loss to the original bidder....And who knows what our Premium domains would be worth in 5 years time?)

There is also the opportunity Loss of potential earnings from that domain to the original winners through development, over time.


Sedo should VERY carefully consider that a lawsuit with the original winners could be VERY expensive, indeed, in punitive damages......Not to mention the damage to confidence in Sedo's auction reputation, whilst up to 100 people join together to drag them through the courts...

.

 

[domain_trader]

If this hits court and Sedo demonstrates in good faith what happened indeed
occurred, then I'm sorry to say all those confirmations you got in your PCs or
so will likely mean nothing. Sedo's contract you all agreed to (check box and
all) includes disclaimers of warranty and all that.

I agree with DomainTalker - not sure how this gets SEDO out of the woods. If their system had accidentally sent notifications to bidders, then that would be problematic enough. But it seems that as far as the system was concerned, these were the legitimate winners.

Also, SEDO claiming that it was only a resolution problem doesn't really make sense. We don't know the details of how they have set up their system, but you would think that their database must have recognised the first round highest bidders as the winners otherwise the automatic notification system wouldn't have kicked in.

I'm not necessarily calling SEDO liars, but that statement raises more questions than it answers, and doesn't change the issue at all - a technical malfunction interfered with the bidding process, and the system awarded the wins to the last bids it had recorded. The fact that some other part of the system was still accepting bids is not a real defence. As I indicated in an earlier post, SEDO's own terms and conditions indicate that technical malfunctions are not grounds for disputing the outcome.

 

[DomainTalker]

As I indicated in an earlier post, SEDO's terms and conditions indicate that technicality malfunctions are not grounds for disputing the outcome.

Great point, domain trader...

Having read Sedo's 'explanation' email, yesterday (posted earlier in this thread), I don't think Sedo have any idea just what they've done...Nor, the scale of the problem they face...


They are behaving as if they have a small technical problem - and that, somehow, the 100 original disappointed winners of prime internet real estate will just go quietly away...!!


Well, they won't.


If they are watching this thread, then they will see that they have a reasonably inexpensive way out - at the moment (my post #69 above). I suggest they act on that now.


If they don't give us back our domains - they will face the courts in multiple jurisdictions....with major New York Law Firms already lining up....And I have notified Sedo to that effect.

.

 

[namewaiter]

then they will see that they have a reasonably inexpensive way out - at the moment (my post #69 above). I suggest they act on that now.

.

domaintalker .. i feel for you, i really do, but if they were to take your way out then they would be facing a situation much worse.... your way may have had the total spend at avout $250,000 in sales... the other way ended in over $2,000,000 in sales