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27 Feb 2008

The Front Running Class Action Suit ICANN

In a recent press release, Los Angeles law firm Kabateck Brown Kellner says it's filed a class action suit against Network Solutions and ICANN for front running. (If you tuned in late, NetSol admits that if you query a domain name on their web site, they will speculatively register it so that it's only available through NetSol for five days, at their above market price.) This is a very peculiar suit.

For one thing, it's hard to see how the total class damages would be large enough to be worth a suit. The difference between NetSol's price and a normal registrar is about $25. In October, the most recent month reported, NetSol added about 55,000 new domains. Let's wave our hands and say that a quarter of those would have used a cheaper registrar, a rather high estimate, since I believe that most NetSol customers buy their domains as part of a larger package, and this complaint only makes sense for standalone registrations. Multiply that number of registrations by $25 and you get about $300,000 per month, and NetSol's only been doing this for a few months. The amount of alleged damages is rather low for a speculative suit like this one.

For another thing, although front running is certainly sleazy and anti-consumer, it's hard for me to see what's illegal about it. The press release is not informative and the analogy it makes to car dealers is not helpful.

PACER does not yet have any documents for this case, so when they appear I'll take a look and see if it becomes any clearer.

  posted at: 23:43 :: permanent link to this entry :: 0 comments
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