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ICANN reports .sucks to the FTC over “predatory” pricing

Kevin Murphy, April 9, 2015, 19:25:20 (UTC), Domain Registries

ICANN has referred .sucks registry Vox Populi to the US Federal Trade Commission over concerns from intellectual property owners that its pricing is “predatory”.
The organization has asked the FTC and the Canadian Office of Consumer Affairs to determine whether Vox Pop is breaking any laws.
It asks both agencies to “consider assessing and determining whether Vox Populi is violating any laws or regulations enforced by your respective offices”.
If it is determined that laws are being broken, ICANN said it would be able to “enforce remedies” in the .sucks registry agreement.
ICANN goes on to say that it is “evaluating other remedies” in the registry’s contract.
The shock news comes two weeks after the Intellectual Property Constituency of ICANN complained that Vox Pop’s $2,000 sunrise fee is just a “shakedown scheme”.
The IPC said March 27 it was:

formally asking ICANN to halt the rollout of the .SUCKS new gTLD operated by Vox Populi Registry Inc. (“Vox Populi”), so that the community can examine the validity of Vox Populi’s recently announced plans to: (1) to categorize TMCH-registered marks as “premium names,” (2) charge exorbitant sums to brand owners who seek to secure a registration in .SUCKS, and (3) conspire with an (alleged) third party to “subsidize” a complaint site should brand owners fail to cooperate in Vox Populi’s shakedown scheme.

The IPC is also pissed off that there’s a Sunrise Premium fee that applies to the most famous brands, regardless of when they register.
Vox Pop CEO John Berard told DI tonight that the company’s pricing and policies are “well within the rules”, meaning both ICANN’s rules and North American laws.
He asked why ICANN has referred the matter to the FTC, given that Vox Populi is a Canadian company.
He said that a senior ICANN executive had told him it was because many IPC members are US-based. He described this as “appeasement” of the IPC interests.
Greg Shatan, president of the IPC, whose letter sparked ICANN’s outreach to the FTC and OCA, said that the word “justice” is more appropriate than “appeasement”. He told DI tonight:

We’re looking forward to the FTC and OCA taking a look at Vox Populi’s behavior. And there’s lots to look at. The punitive TMCH Sunrise, where a “rights protection mechanism” intended to protect trademark owners has been turned into a scheme to extort $2,500 and up… The eternal Sunrise Premium of the far-from-spotless .SUCKS registry. The mysterious “everybody.sucks” — purportedly a third party, purportedly providing a “subsidy” to registrant — would anyone be surprised if that was a sham?

With reference to the FTC referral, Shatan also told DI tonight:

I don’t think ICANN wants to waste the FTC’s time. It’s far more rational to think that ICANN informed the FTC because Vox Populi’s activities are within the jurisdiction of the FTC. Mr. Berard’s remarks seem to indicate that he believes that Vox Populi operates beyond the reach of US laws.
With a tech contact in Bermuda and an admin contact in the Caymans, that may have been Vox Pop’s intention. Vox Pop may be operating outside US laws, but I doubt they are operating beyond their reach.

Vox Populi is incorporated in Canada, hence ICANN’s outreach to the Canadian regulator. According to its gTLD application, its only 15%+ owner is Momentous, another Canadian company.
But its IANA record lists an address in Bermuda for its technical contact and Uniregistry’s office in Grand Cayman as its administrative address.
There’s been rumors for months that Uniregistry or CEO Frank Schilling helped bankroll Vox Populi’s participation in the .sucks auction, which saw it splash out over $3 million.
ICANN is asking the US and Canadian agencies to respond to its letter with “urgency”, as .sucks is currently in sunrise and is due to go to general availability May 29.
Trademark owners and celebrities are already registering their names in the .sucks sunrise period.
ICANN confirmed in a separate letter today to IPC chair Greg Shatan that Vox Pop has paid ICANN a unique $100,000 start-up fee, and has promised to pay an extra $1 per transaction, due to now-defunct Momentous subsidiaries defaulting on “substantial payments”.
As DI reported last week, ICANN says that the fee is “not related to the nature” of .sucks, but it could give the appearance that ICANN is a beneficiary of the .sucks business model.
This article was published quite quickly after the news broke. It was updated several times on April 9, 2015. It was updated with background material. It was then updated with comments from Vox Pop. It was then updated with comments from the IPC. Later commenters had the benefit of reading earlier versions of this post before they submitted their comments.

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Comments (9)

  1. Michael Seven says:
    April 9, 2015 at 8:24 pm

    ICANN should be a party in the complaint. They created this mess and ignored those that were concerned about this type of abuse. It seems irresponsible and ALL domain names are impacted by this and the runaway train called ICANN.

    Reply
    • Brad Mugford says:
      April 9, 2015 at 8:42 pm

      I agree. At the end of the day ICANN is as responsible for this. They approved the extension despite the obvious concerns.
      I think this might be an attempt by ICANN to try and protect itself from potential legal actions regarding their role. If this is considered extortion, then ICANN is complicit in their actions.
      Brad

      Reply
      • Volker Greimann says:
        April 13, 2015 at 10:30 am

        When the TLD was approved, the pricing scheme that is at the center of the complaint was not yet defined.

        Reply
  2. Brad Mugford says:
    April 9, 2015 at 8:51 pm

    “He asked why ICANN has referred the matter to the FTC, given that Vox Populi is a Canadian company.”
    Well, ICANN is US based. They are subject to US laws. Their contract with any 3rd party would also be subject to US laws.
    Of course, that is unless ICANN gets their way and is basically set free and above the laws.
    I think with ICANN’s track record they can not really be trusted to to do the right thing and self police themselves.
    Brad

    Reply
  3. Tom says:
    April 9, 2015 at 11:45 pm

    Does ICANN not profit from every registration? $1 special

    Reply
  4. BT says:
    April 10, 2015 at 6:27 am

    A registry came along and said we’re gonna charge registrants $1999 a name. The registrants want the name pretty bad and so they said “this is a crime” ICANN shrugs it’s shoulders, see’s no crime and asks the FTC and Canadian FTC to corroborate, to cover its ass. That’s what happened here. What flavor do you want your predatory shakedown scheme? Looking forward to the $5 versions of this thing for protest because ICANN.sucks

    Reply
  5. Beer says:
    April 10, 2015 at 8:13 am

    35 pages from the Registry (nic.sucks) are indexed in Google already and the risk of being associated to .sucks is going to increase. Trademarks should pay attention to this.

    Reply

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