Could ICANN Prohibit Registrars from Investing in Domain Names?

A UDRP was filed against the 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 from owning domain names as investments since that is a complicated matter. 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 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 Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.

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