A class-action lawsuit filed on Monday against Network Solutions alleges the company has unfairly profited from its domain name registration business.
The lawsuit, filed in U.S. District Court for the Central District of California, takes issue with a policy Network Solutions implemented in December. The company says the policy is intended to protect people trying to reserve a domain name, but others say steers business to Network Solutions.
The company automatically reserves a domain name after someone merely conducts a search on Network Solutions' Web site. If someone goes to another domain name registrar just seconds later, the domain name won't be available.
The only option a person has is to buy the domain name from Network Solutions, which can cost as much as US$34.99, according to a news release from Kabateck Brown Kellner LLP, a Los Angeles law firm.
Network Solutions will eventually give up the domain name before the end of the Add-Grace Period, which lets someone get a refund for a domain name within five days of registering one.
The Add-Grace Period is allowed for some Top Level Domains (TLDs) by the Internet Corporation for Assigned Names and Numbers (ICANN), the overseer of the Internet's addressing system, which is also named in the class-action suit.
Network Solutions says its policy counters "front running," a practice where scammers get access to domain name search records and immediately register searched domains names. Sometimes those domains are stacked with pay-per-click ads during the five-day period to see how much traffic the sites get, a practice known as domain "tasting."
Other times, the person who registered the domain hopes to sell for a profit to the person who searched for it.
Network Solutions was heavily criticized for implementing the policy without notifying people who searched for domain names. It has since posted more detailed information on its Web site.
The lawsuit alleges Network Solutions' domain registration fees are too expensive, and that the same domain name could be registered for as little as $9.99. The policy has netted the company millions of dollars, and essentially allowed it to create a monopoly, the law firm said.
Last month, Network Solutions said it would halt its policy if ICANN approves a change under consideration to the Add-Grace Period.
As part of its fiscal 2009 budget, ICANN is considering keeping the $0.20 fee it charges for registering domains, regardless if one is given up during the grace period. The move is intended to make it much more expensive to taste domains in bulk.