[ga] Slamming: An Industry Out of Control

[DannyYounger@cs.com]

Register.com v. Domain Registry of Canada
By ComputerWire
Posted: 13/09/2002 at 07:22 GMT
http://www.theregister.co.uk/content/6/27101.html

Register.com Inc is suing a competitor for allegedly using deceptive tactics 
to lure away its domain name registration customers. But defendant Domain 
Registry of Canada Inc seems to think Register.com is using very similar 
tactics itself, Kevin Murphy writes. 

Register.com sued DROC in its native New York this week, alleging unfair 
competition, false advertising, breach of contract and misappropriation of 
trade secrets. The larger firm alleges DROC engages in a "deceptive and 
misleading scheme" - a marketing practice known as "domain slamming" - that 
is costing it thousands of customers. 

Slamming is the name given to the practice when a registrar sends a 
solicitation to a customer of a competitor, asking them to transfer their 
business, but makes the solicitation look like a renewal notice or an 
expiration notice, to confuse them into making the switch. 

"These solicitations do not mention that it was Register.com, and not any of 
the defendants, that originally registered the customers' domain names," the 
complaint reads. "Nor do they explain that customers who accept defendants' 
solicitation will actually be transferring their domain name registrations to 
a direct competitor of Register.com." 

The company said that in a sample week this August, about 15% of all the 
customers that transferred from Register.com to another registrar transferred 
to DROC, which is a reseller for Washington-based eNom Inc and also trades as 
Domain Registry of America Inc. 

This is a large percentage, considering there are 122 accredited registrars 
and thousands of resellers on the market currently. Register.com says it has 
already lost thousands of customers, each of whom pay around $30 a year for a 
domain, and is in danger of losing thousands more if DROC continues its 
mailshots. 

A copy of a DROC letter sent to a rival's customer, seen by ComputerWire, is 
entitled "Important Notice" and encourages the registrant to "renew" their 
domain with the company. It does not use the word "transfer", but explicitly 
says that it is not an invoice, and alludes to the fact that other registrars 
are available. 

But DROC says that it is doing nothing wrong. The company is suing Tucows 
Inc, another rival, for defamation over claims Tucows told customers its 
mailers were misleading and could not be trusted (Tucows is countersuing, 
alleging slamming). DROC also says Register.com engages in similar practices. 

"They were the first company that ever did it," a DROC spokesperson said. 
"This is nothing new." 

A copy of a Register.com mailer seen by ComputerWire is entitled "Domain 
Expiration Notice", and invites the registrant to "renew and transfer" their 
name to Register.com. Like the DROC mailer, it does not mention the original 
registrar by name, but it does use the word "transfer". 

"All the mailers sent out make it very clear it's a transfer," a Register.com 
spokesperson said. "We make sure there are a certain amount of references to 
'transfer'." 

While this may be true, the Register.com notice looks very similar to direct 
mail that VeriSign Inc was enjoined from sending out two months ago, after it 
was sued by two rivals. The notice from VeriSign, the market leader, made 
less references to "transferring" domains to another registrar than the 
Register.com letter. 
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