A federal class action lawsuit has been filed against the domain name registration company and domain name regulator for allegedly forcing millions of people to purchase expensive internet domain names. The lawsuit was filed in US District Court, Central District of California and claims Network Solutions purchases domain names when people search for them on their website and then tries to sell them to the customer for a higher price than its competitors.
The class action claims that when people search 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 and when consumers visit other, less expensive sites to register the name, the name would be 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. These actions allow Network Solutions to charge substantially higher prices for domain name registration.
Network Solutions' scheme is made possible by ICANN, which allows companies that sell domain names to avoid paying registration fees for names canceled 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 that regulates domain names and other Internet protocols.
