VeriSign slammed for domain renewal scam

But FTC accepts it didn’t break the law

By Kieren McCarthy, 25th September 2003

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VeriSign has been rapped over the knuckles by the FTC for its calculated attempt to steal domains from competitors - a practice called "slamming".

However in a ruling by the government arm, VeriSign was found not to have broken the law and so avoided a hefty fine. It has however been barred from suggesting that someone’s domain is about to expire or that what is in fact a transfer is no more than a renewal.

It has also been ordered to compensate anyone that was tricked by the underhand tactic.

Last year, the registrar that runs the .com and .net domains infuriated other domain registrars and consumers alike when it sent out ambiguous emails informing people their domain was about to expire and they needed to click on a link to renew it. A hard-to-see VeriSign logo was the only indication that the email wasn’t from the company the domain was currently
registered with.

Thousands “renewed” their domains but in many cases it was months or even years until the domain was due to expire and in each case the individual unwittingly transferred their domain to VeriSign - normally always at a higher price.

The emails saw an immediate legal response from the main two registrars affected - GoDaddy and BulkRegister, who swiftly won an injunction - and
also saw several class action lawsuits from duped consumers, now settled in their favour.

This is not the first time VeriSign has abused its powerful position in the domain market in order to frustrate efforts to turn its once monopoly into a
competitive market. Last week, its SiteFinder program directed most non-existent domains to its own webpage, sparking an immediate lawsuit and an angry request by ICANN to switch it off, which it has continued to
ignore.

As ever though, the company is unrepentant. "This matter relates to a marketing campaign that was discontinued over a year ago," it said in a statement following the ruling. "VeriSign cooperated fully with the FTC and is pleased to have this matter resolved."

Plus ca change... ®

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