Network Solutions is being accused in the suit of 'front
running', the practice of locking an address as soon as someone
asks if it is free. The person then has to buy the address from
whoever has locked it, potentially at an inflated price.
It has long been suspected that front running is practised by
companies exploiting 'whois' searches, whereby someone checks to
see if a domain is free.
Network Solutions recently implemented controversial policies
that it claimed were designed to protect consumers against front
running. Critics have complained that the policies themselves
amount to front running.
When some of the domain name searching tools on Network
Solutions' web site are used, the searched-for domains are
registered to the company immediately. It says that this is to
ensure that no unscrupulous firm registers the address, and the
address is then available for any Network Solutions customer to
register it.
"By implementing this we are not front-running, we are just
holding it for four days," Network Solutions spokeswoman Susan Wade
recently told OUT-LAW Radio.
"We are not monetising it, we have no intention of keeping it or
selling it in the secondary market, we are just holding it and if
you want to come back to our store front and buy it you can, after
that we are letting it go," she said.
US law firm Kabateck Brown Kellner has begun a class action suit
against the company, though, claiming that it has earned millions
of dollars by locking in customers who made a query by forcing them
into buying domain names from it and not a competitor.
"Imagine if you asked a car dealer if they had a black
convertible and were then forced to buy the car from them. Would
you get a good deal?" said Brian Kabateck, lead counsel in the
class action and managing partner or the firm. "Each time someone
asks Network Solutions about a domain name, the firm creates a
monopoly for itself, forcing consumers to pay the price they
demand."
A statement from Kabateck Brown Kellner said that "ICANN is
aware that Network Solutions is abusing this policy and yet
continues to facilitate its actions".
Though front running has long been rumoured to be taking place,
a recent ICANN investigation found no evidence of it. A committee
of the organisation analysed 120 submitted examples of the practice
and found that many were down to people's misunderstanding of how
domain registration works.
A report earlier this month by ICANN's Security and Stability
Advisory Committee (SSAC) said: "If the claims reviewed by SSAC are
representative of all claims, acts frequently interpreted as domain
front running often prove to be side effects of domain name tasting
and other secondary market activities."
