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Go Daddy-Google group targets bogus pill merchants

Kevin Murphy, December 15, 2010, Domain Policy

The newly forming industry body tasked with taking down web sites selling fake pharmaceuticals plans to meet next month to develop its mission statement and charter, according to Go Daddy general counsel Christine Jones.

Jones said in an interview tonight that the group, which Go Daddy is jointly “spearheading” with Google, is likely to meet in Phoenix, Arizona in the third week of January.

As I blogged earlier today, the organization was formed following a series of meetings at the White House, which has a policy of reducing counterfeit drugs sales online.

Domain name companies including Go Daddy, eNom, Neustar and Network Solutions are joined in the currently nameless non-profit by the three major search engines and all the major payment processors.

Jones confirmed that redirecting a domain name is an action a participating registrar could take if it finds an infringing site. Go Daddy and others already do this in cases of child porn, for example.

But the group will also share information about fake pharma sites so Google, for example, would also be able to block them from search and Visa could stop payments being processed, Jones told me.

The White House meetings were organized by Victoria Espinel, the administration’s Intellectual Property Enforcement Coordinator (IPEC).

So, while the group has yet to formalize its policies, I wanted to know what the prevailing opinion is on how “illegal” a site will have to be before the group will try to take it down.

Taking down a site selling sugar pills or industrial acid as HIV treatments is one thing, killing a site selling genuine medications to people without prescriptions is another, and blocking a legit pharmacy that sells drugs to Americans with prescriptions more cheaply from across the Canadian border is yet another.

Jones said: “If a pharmacy is a licensed pharmacy and is abiding by whatever the state rules are wherever they’re located, that’s not our target.”

Apparently the new organization, which will be formed as a non-profit entity, may help the companies to avoid running afoul of ECPA, the US Electronic Communications Privacy Act.

Jones said that other companies participating in the White House meetings still have not decided whether to join the new group or not. End-of-year budgetary issues may be a factor here.

Domain registrars have come in for considerable flak over 2010 for allegedly not doing enough to counter fake pharma sites.

A Knujon report published in May, and others, eventually led to eNom in particular promising to crack down harder on rogue pharmacies.

Go Daddy proposes fake pharma site shutdown body

Kevin Murphy, December 15, 2010, Domain Policy

A cross-industry body that will make it easier for web sites selling fake drugs to be shut down is forming in the US, led by Google and Go Daddy.

The idea for the currently nameless organization was announced yesterday following a series of meetings between the internet industry and White House officials.

The group will “start taking voluntary action against illegal Internet pharmacies” which will include stopping payment processing and shutting down web sites.

The domain name business is represented by the three biggest US registrars – Go Daddy, eNom and Network Solutions – as well as Neustar (.biz, .us, etc) on the registry side.

Surprisingly, VeriSign (.com) does not appear to be involved currently.

Other members include the major credit card companies – American Express, Visa and Mastercard – as well as PayPal and search engines Google, Microsoft and Yahoo.

According to a statement provided by Neustar:

GoDaddy and Google took the lead on proposing the formation of a private sector 501(c)(3) non-profit organization that would be dedicated to promoting information sharing, education, and more efficient law enforcement of rogue internet pharmacies.

It’s early days, so there are no specifics as yet as to how the organization will function, such as under what circumstances it will take down sites.

There’s no specific mention of domain names being turned off or seized, although reading between the lines that may be part of the plan.

There’s substantial debate in the US as to what kinds of pharmaceuticals sites constitute a risk to health and consumer protection.

While many sites do sell worthless or potentially harmful medications, others are overseas companies selling genuine pharma cheaply to Americans, who often pay a stiff premium for their drugs.

The organization will do more than just shut down sites, however.

It also proposes an expansion to white lists of genuine pharmacies such as the National Association of Boards of Pharmacies’ Verified Internet Pharmacy Practice Sites (VIPPS).

And it will promote consumer education about the “dangers” of shopping for drugs online, as well as sharing information to stop the genuine bad guys “forum shopping” for places to host their sites.

This is what the statement says about enforcement:

The organization’s members agree to share information with law enforcement about unlawful Internet pharmacies where appropriate, accept information about Internet pharmacies operating illegally, and take voluntary enforcement action (stop payment, shut down the site, etc.) where appropriate.

While taking down sites that are selling genuinely harmful pills is undoubtedly a Good Thing, I suspect it is unlikely to go down well in that sector of the internet community concerned with the US government’s increasing role in removing content from the internet.

Vertical integration – bad news for domainers?

Kevin Murphy, November 10, 2010, Domain Registries

ICANN’s decision to allow domain name registrars to operate registries is a game changer on many fronts, but what impact could it have on domain investors?

For the first time, registrars will be able apply for and run new top-level domains, giving them unprecedented insight into registry-level data.

If they also act as registries, registrars will, for example, be able to see what non-existent domains in their TLD get the most type-in traffic.

They will also be able to see how much traffic expiring domains get, even if the registrant does not use the registrar’s own name servers.

As claimed by some participants in ICANN’s vertical integration working group, this data could be used to “harm” registrants; harms that could be especially noticeable to domainers.

There was a concern from some in the WG that combined registry-registrar entities (we’re going to need a name for these) could use registry data to, for example, identify and withhold high-value names, increasing prices to potential registrants.

The possibility of an increase in “domain tasting” and “front-running” – practices generally frowned upon nowadays – was also raised.

However, some registrars are already owned by companies that register large numbers of traffic domains for themselves, even without access to registry data.

Demand Media subsidiary eNom, the second-largest gTLD registrar, is a good example.

As DomainNameWire reported in August, the company already uses domain name lookups to decide what names to register for itself (though it told DNW it does not “front-run”), saying in SEC filings:

These queries and look-ups provide insight into what consumers may be seeking online and represent a proprietary and valuable source of relevant information for our platform’s title generation algorithms and the algorithms we use to acquire undeveloped websites for our portfolio.

Demand also said that it acquires eNom customers’ expiring domains if they are attractive enough:

Domain names not renewed by their prior registrants that meet certain of our criteria are acquired by us to augment our portfolio of undeveloped owned and operated websites.

Access to registry data could prove invaluable in refining this model, and eNom has, unsurprisingly. long indicated its desire to apply for and operate new TLDs.

But will registries be allowed to exploit this data to line their own pockets?

ICANN indicated today that it plans to introduce a code of conduct for registries, to prevent “misuse of data”, and will likely step up its compliance activities as a result.

What this code of conduct will look like remains to be seen, but I expect we’re looking at “Chinese wall” provisions similar to those self-imposed by VeriSign when it still owned Network Solutions.

It should be pointed out, of course, that standalone registries already have the ability to register domains to themselves, based on their own registry data, and I’m not aware of a great many incidents where this has been abused to the harm of registrants.

Demand Media to invest up to $75m in content

Kevin Murphy, October 12, 2010, Domain Registrars

Demand Media plans to invest between $50 million and $75 million in content in 2011, according to the company’s latest IPO filing.

The company, which owns number two registrar eNom, has also disclosed that it plans to list itself on the New York Stock Exchange under the ticker symbol DMD.

Under “Use of Proceeds” in its latest amended S-1 registration form (huge HTML file), filed today with the Securities and Exchange Commission, Demand says:

We currently anticipate that our aggregate investments in content during the year ending December 31, 2011 will range from $50 million to $75 million.

Demand Media’s main business is the advertising it sells against the thousands of freelance articles it publishes every day. It had about $102 million in current assets on its balance sheet on June 30 this year.

Previous text talking about about using the proceeds of the IPO to “acquire or invest in complementary technologies, solutions or businesses” has been dropped.

The amended S-1 spends quite a lot of time talking about a reverse stock split that it is carrying out prior to its public offering.

Government ‘cybersquatting’ case rattles India

Kevin Murphy, October 4, 2010, Domain Services

Cybersquatting mischief is making headlines in India today, after the nation’s main opposition party accused the government of directing a confusingly similar domain name to its own site.

According to various reports, the opposition Bharatiya Janata Party served a “legal notice” on the ruling Indian National Congress party over the domain name bjp.com.

The BJP hosts its primary site at bjp.org. According to the party, the .com domain has been redirecting users to the Congress’ own site. Today, it resolves to a page parked at Sedo.

The contested domain is currently registered behind eNom’s privacy protection service. It appears to have changed hands several times over the years, most recently to an Indian.

Unless the BJP has some other evidence connecting its rival to the domain, it looks like this may be a case of cheap political point-scoring.