FTC chief says most new gTLD bids are “defensive”

Kevin Murphy, January 3, 2013, 20:23:20 (UTC), Domain Policy

The US Federal Trade Commission is still “looking at” ICANN’s new gTLD program amid concerns that most of the applicants applied defensively, it has emerged.

FTC chairman Jon Leibowitz also said today that he thinks new gTLDs will cause consumer confusion and lead to an increase in fraud.

“We have been very, very concerned about ICANN and their dramatic expansion of the domain names, which we think will cause consumer confusion and even worse lead to more areas where malefactors can hide from the law while defrauding consumers,” Leibowitz said.

“A lot of companies that have plunked down $185,000 per domain name — and there have been hundreds of companies that have done it — have mostly done it for defensive purposes,” he added.

Most new gTLDs are not dot-brands, so Leibowitz probably misspoke when he said that “most” applications are defensive. Within the subset of bids that are dot-brands, he may be on firmer ground.

His comments came during a press conference to discuss the FTC’s settlement of its competition probe of Google, which has itself applied for almost 100 new gTLDs.

The settlement agreement relates to Google’s search practices and not its gTLD applications.

Leibowitz said that the FTC is “not looking that issue [new gTLDs] with respect to Google, we’re looking at that issue with respect to ICANN”.

The FTC’s concerns about the program are not new, but it has not publicly expressed them recently.

In December 2011 the agency said the program could “magnify both the abuse of the domain name system and the corresponding challenges we encounter in tracking down Internet fraudsters.”

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Comments (9)

  1. andrew says:

    I’d argue many generic applications from brands are defensive, e.g..baby

    • Kevin Murphy says:

      By the dictionary definition of “defensive”, maybe. Not in the sense it’s usually used in the domain business though.

  2. gpmgroup says:

    Brand or Generic it’s defensive, if it is just to prevent others from using it to compete.

    It’s also defensive if it’s just to see if there is any chance of other new gTLDs gaining any traction.

    It is also defensive in the event that some gTLDs do gain some traction with consumers in years to come but offer no tangible additional benefits and are simply, used to duplicate / recreate existing services and marketing in a much more expensive marketplace.

    (i.e. $185,000 + $25,000 per year compared with $10 per year for a .com)

    • Kevin Murphy says:

      You know, the only reason I write this blog is to defend against hunger… ;)

      • gpmgroup says:

        And, if you had hungered for that illusive ‘innovation’ and had applied for .domainincite you would have to type much faster to feed not only yourself but also your new $25,000 a year partners :)

  3. Jon Nevett says:

    Kevin, Do you think that the argument that most brand applicants applied defensively — to ensure that another applicant wouldn’t get their TLD, but they really don’t want to use their TLD — discredited by the fact that most of them recently voluntarily paid ICANN more to participate in the Draw to have their names available first?

  4. It is evident that brands are, for now playing defense, defined as; ‘apply now – think later’, due to uncertainty on new gTLD program implications.
    Their councils have recommended applications be completed and so they did. It seems only a handful of the business, product and marketing folks have applied their mental cycles due to extended and uncertain timelines. These leaders are thinking quarterly results, so any planning and action on gTLDs rightly drops down the priority queue until the timelines firm up.

    All said, some brand thinkers will start digging in now. A few, who lead by their own wits vs self-serving agency pitches will see it as an innovation opportunity to differentiate and execute something really neat to advance the brand.

    Most will soon recognize that playing defense against phishing and fraud with 1000+ new TLDs, can only be solved through a .brand registry play. “If it isn’t .brand, beware.” The alternative to protect by registering 1000s or tens of thousands of brand related second level domains is pure folly.

    It’s going to be a dynamic new sandbox with untold turns and discoveries.

  5. McGaz says:

    Saying the “most” of the applications are defensive is a very pessimistic way of looking at it. I don’t think that is the case at all.

    For brands, I think it will create a great marketing advantage and also make things easier for consumers. Some of the lock-down attempted on gTLDs by the likes of Amazon are a bit dodgy and it will be interesting on what outcome those applications receive.

    As for confusion, search engines and browsers are already directing people to sites much easier with things such as integrated URL/Search bars and auto-complete options. It becomes rarer and rarer to actually type in a domain name.

    We’ll find that most people use the search engines to find sites and any confusion will last a relatively short period of time.

    I don’t see fraud increasing either. Most fraud uses fake links which have similar domains, but not the real domain. There will be no difference between using a new gTLD which is fake in comparison to a .com or .ru, etc fake address.

    I think the argument, from the article at least, is weak.

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