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Competitor Sues VeriSign Over 'Deceptive' Marketing

Suit alleges Verisign tried to poach GoDaddy customers by telling them their domain names were about to expire.

Linda Rosencrance, Computerworld

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Internet domain-name company GoDaddy Software is suing VeriSign to prevent the Internet registrar from engaging in "deceptive" marketing practices prompting GoDaddy customers to switch their business to VeriSign.

In the lawsuit, filed Wednesday in U.S. District Court in Phoenix, GoDaddy alleged that VeriSign engaged in false and deceptive practices, interfered with customer relationships and misappropriated trade secrets.

Scottsdale, Arizona-based GoDaddy also accused Mountain View, California-based VeriSign, which maintains the central registry of .com, .org, and .net Web site names, of consumer fraud.

VeriSign spokeswoman Cheryl Regan said the company doesn't comment on ongoing litigation.

Misleading Mailings?

In a statement, GoDaddy said the lawsuit was triggered by letters that VeriSign sent to GoDaddy's customers marked "Domain Name Expiration Notices." The letters encouraged customers to send $29 to renew each domain name, or risk losing those names, GoDaddy said.

However, GoDaddy said, the "reply by" dates on those notices didn't correlate with actual domain name expiration dates. By signing and returning the form, GoDaddy's customers inadvertently transferred their business to VeriSign--and at a higher price, GoDaddy said. GoDaddy's charges its customers $8.95 per domain name; VeriSign charges $29.

A spokesman for GoDaddy couldn't be reached for further comment.

Not the First Time

VeriSign has also been sued by other companies and consumer groups, including Baltimore-based BulkRegister.com, for similar practices. In May, a federal judge in Maryland ordered VeriSign and its bulk-mailing contractors to stop sending mailings to BulkRegister.com customers. The judge ruled that BulkRegister.com had been hurt by the mailings and that the damage would continue if the mailing weren't stopped.

VeriSign is also facing several class-action lawsuits by shareholders who accuse the company of misleading them about its business and financial condition.

Computerworld
For more enterprise computing news, visit Computerworld. Story copyright © 2007 Computerworld Inc. All rights reserved.

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