Apr 30, 2017

Network Solutions Sued For Defrauding Millions

Published Feb 28, 2008, 9:09pm

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Network Solutions Sued For Defrauding Millions

Network Solutions has forced millions of people to buy Internet domain names from them instead of cheaper competitors through a scheme that's netted the firm millions of dollars, a federal class action lawsuit filed today by Kabateck Brown Kellner, LLP states. ICANN, whose policies facilitate the scheme, is also named in the suit, filed in U.S. District Court, Central District of California.

"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? 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," said Brian Kabateck, lead counsel in the class action and Kabateck Brown Kellner's Managing Partner.

Whenever someone searches for the availability of a domain name through Network Solutions' website, the company immediately registers the name for itself, preventing other companies from selling it and forcing consumers to pay Network Solutions' expensive fees.

If a consumer were to go to another, cheaper site to register the name, they would find the name is "unavailable." Consumers are never informed that inquiring as to a name's availability through Network Solutions results in the company holding a monopoly on selling that name.

This allows Network Solutions to continue charging substantially higher prices for domain name registration. Network Solutions charged $34.99 to register the name sought by this suit's lead plaintiff. A competitor would have charged $9.99.

Network Solutions' scheme is made possible by ICANN. ICANN allows companies that sell domain names to avoid paying registration fees for names cancelled within five days. Thus, Network Solutions can defraud customers at no cost to itself.

ICANN is aware that Network Solutions is abusing this policy and yet continues to facilitate its actions.

ICANN is the international organization, headquartered in Marina Del Rey, CA, that regulates domain names and other Internet protocols.



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