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Network Solutions LLC has been sued on Monday by and LA
firm, claiming the Herndon-based company obtained millions of dollars through a
money-making scheme that forced users to buy domain names from them. The lawsuit
also included ICANN (Internet Corporation for Assigned Names and Numbers), who is
accused of associating and facilitating the scheme.
The company that once had monopoly on the domain market
charges over 4 times more for a domain, compared to its competitors, and found
a new modality to keep earnings high, despite that: every time a user searched
for a domain name on the site, Network Solutions registered the domain, which
gave the buyer two alternatives: either give up the domain or buy it from
Network Solutions for $35/year.
According to the lawsuit filed in U.S. District Court,
Central District of California by Kabateck Brown Kellner, “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.”
Network Solutions adopted such a policy in January this
year, forcing customers to pay more or not buy the domain they were interested
in. In other words, the company automatically reserved the searched domain for
itself for four days, stopping competition from buying it and forcing the
buyer, which was very likely to accept the deal within those four days, to pay
$35/year instead of $8/year- the price of the competition.
Up until this point, 72,000 domains have been bought through
this method: “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,” Kabateck Brown
Kellner said.
Kabateck Brown Keller LLP is one of U.S.’ foremost consumer
class actions law firms and recovered over $500 million for their clients, and
its lawsuits, whether finished or pending, involved names such as Coca Cola,
Google, Yahoo, Epson and others.
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