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Beginning of the end for DomainTools? Court orders it to scrub Whois records

Kevin Murphy, September 13, 2018, Domain Registries

DomainTools has been temporarily banned from collecting and publishing the Whois records of all .nz domains.

A Washington court yesterday handed down a preliminary injunction against the company, after New Zealand’s Domain Name Commission sued it in July for scraping and republishing its Whois in violation of its terms of service.

Notably — especially if you’re involved in the ongoing Whois reform debate — Judge Robert Lasnik’s scathing order (pdf) rubbished DomainTools’ claims that its historical Whois service provides a public interest benefit that outweighs the privacy interests of .nz registrants.

The ruling by its own admission also potentially opens the floodgates for other registries and registrars to obtain injunctions against DomainTools for the own customers.

DomainTools has been “enjoined from accessing the .nz register while DomainTools’ limited license remains revoked and/or publishing any .nz register data DomainTools had stored or compiled in its own databases”.

DNC, the policy body that oversees .nz registry InternetNZ, had alleged that DomainTools had created a “secondary or shadow register” by bulk-downloading Whois records.

Since mid-2016, each .nz Whois record has contained a notice that such behavior is prohibited, and Lasnik agreed that DomainTools must surely have been aware of this.

Lasnik further agreed with DNC that DomainTools’ service is “sabotaging” its efforts to bring more privacy protection to .nz customers; since November last year it has offered individuals the ability to opt out of having their private data published, an offer 23,000 people have taken up.

That was enough for the judge to conclude that DNC’s case had met the “irreparable harm” test required for an injunction.

He was less impressed with DomainTools’ argument that implementing the injunction would take many months and cost it up to $3.5 million.

“Defendant can presumably filter the .nz data using relatively simple database tools,” he wrote, ordering DNC to post a “nominal” $1,000 bond to cover DT’s potential losses.

Lasnik also said the public interest would be better served by permitting registrant privacy than by serving the interests of DomainTools’ cybsecurity and law enforcement customers:

defendant argues that the products it creates from its meticulously collected register data are critical cybersecurity resources and that the public interest would be harmed if the reports provided to government, financial, and law enforcement entities were incomplete because the .nz data were excised. The .nz register is comparatively small, however (approximately 710,000 domains compared with over 135,000,000 .com domains), and the defendant and its customers can access the registration information directly through plaintiff’s website if it appears that a bad actor is using an .nz domain. On the other hand, the .nz registrants’ privacy and security interests are compromised as long as defendant is publishing non-current or historical .nz information out of its database. The Court finds that the public has an interest in the issuance of an injunction.

While arguably limited to historical Whois records, it’s a rare example of judicial commentary on the privacy rights of registrants and may well play into the ongoing debate about Whois in the post-GDPR world.

Even if it turns out not to have wider policy implications, the legal implications for DomainTools are potentially devastating.

While .nz has only about 710,000 domains under management, and is but one of over 1,500 TLDs, DomainTools, DNC and Judge Lasnik all seem to agree that the floodgates for further litigation may have now opened. Lasnik wrote:

defendant argues that a preliminary injunction in this case could start an avalanche of litigation as other registers attempt to protect the privacy of their registrants. If defendant built a business by downloading, storing, and using data from other registers in violation of the terms that governed its access to that data, defendant may be correct — other registers may be encouraged to pursue a breach of contract claim if plaintiff is successful here. It would be ironic, however, if a plaintiff who has shown a likelihood of success and irreparable injury were deprived of preliminary relief simply because defendant may have acted wrongfully toward others as well

DNC said in a statement: “Managers of other countries domain name systems across the world will want to pay attention to the judgment. This may raise confidence to fight their own cases should DomainTools be breaching their terms of use.”

The case has yet to go to court, but the fact that DNC won the injunction indicates that the judge believes it has a likelihood of winning.

InternetNZ loses two of its three CEOs as it simplifies

Kevin Murphy, December 5, 2017, Domain Registries

InternetNZ has announced the results of a consultation into a restructuring of the organization.

The .nz ccTLD manager is to cut one of its three operating companies and reduce the number of CEOs from three to one.

NZRS, which actually runs the registry, will be folded into InternetNZ, while policy-setting body Domain Name Commission Ltd will remain a separate company in the same group.

Jordan Carter, CEO of the company since 2013, has been picked to carry on leading InternetNZ and to chair the board of DNCL, which is losing three of its 12 seats.

The company threw open the idea of a restructuring back in June, noting that it had 20 governors, three CEOs and 10 senior executives for the 35 full time employees across the three organisations

InternetNZ leadership said in a statement that they hope the changes will help the registry become more effective as it simplifies.

InternetNZ wants to fire two of its three (!) CEOs

InternetNZ, the .nz ccTLD operator, is proposing a radical simplification of the organization in order to stay relevant in the age of new gTLDs.

A proposal put forward late last week would see the non-profit organization fold its two subsidiaries back into the parent and consolidate management under a single CEO.

Currently, InternetNZ owns Domain Name Commission Limited (DNCL), the .nz policy oversight body, and NZRS Limited, which actually runs the registry. Each of the three entities has its own CEO.

The new proposal describes the situation like this:

Our governance and management structures are cumbersome and a lack of single point of accountability makes it difficult to progress work across the group. The size of governance groups and management resource is out of proportion to the size of the organisation and the size of the issues it is dealing with. There are 20 governors, three chief executives and around 10 senior executives for the 35 FTE [Full Time Employees] across the three organisations.

The New Zealand organization needs to streamline, according to the working group that came up with the paper, in order to more effectively compete with the influx of new TLDs, which has seen ccTLDs see slowing growth.

.nz is one of the few ccTLDs that has a direct new gTLD competitor — .kiwi.

It also wants to diversify its revenue streams outside of domain registration fees, according to the paper, with a target of NZD 1 million ($720,000) from alternate sources by 2020.

As a member-based organization, InternetNZ has put the proposal out for public comment until June 30. It will make a decision in August.

Fight breaks out over .kiwi

Kevin Murphy, August 24, 2012, Domain Registries

New Zealand country-code manager InternetNZ has approved the creation of .kiwi.nz, setting the stage for a battle over the proposed new gTLD .kiwi.

InternetNZ announced the new second-level domain today. It’s designed to “increase choice” for New Zealanders who want to register their personal names as domain names.

But it stands to clash with .kiwi, a new gTLD applied for by Dot Kiwi Ltd, a New Zealand subsidiary of a Canadian company, which has partnered with Minds + Machines on the bid.

Dot Kiwi, which had objected to the .kiwi.nz domain, has branded InternetNZ’s move “dissappointing and lacking in common sense”, and suggested it is an attempt to capitalize on .kiwi’s advertising.

The applicant said in a statement:

Our opposition to InternetNZ’s confusing introduction of .kiwi.nzis well documented in repeated submissions we have made to them. Those submissions have been ignored. There will now be widespread confusion with the .kiwi.nz domain and the well-advertised forthcoming launch of the .kiwi domain.

But InternetNZ president Frank March said in a press release that the policy used to approve .kiwi.nz does not consider the possibility of confusion with proposed new gTLDs:

The policy for evaluating a new second-level domain takes into account existing second-level domains in .nz but not possible future changes, such as direct registration under .nz (which is currently being consulted on) or new generic Top Level Domains that may or may not be introduced at some point in the future.

The creation of the new second-level domain does not appear to give InternetNZ leverage to object to .kiwi, under a strict reading of the ICANN Applicant Guidebook.

For ccTLDs to file a String Confusion Objection against a new gTLD application, they must assert confusion with the TLD; the objection does not appear to cover 2LDs.

To date, there has been only one public comment filed with ICANN about .kiwi on confusion grounds.

Kiwis will get an opportunity to vote with their wallets, it seems.

Registrations under .kiwi.nz are expected to open September 11, but under InternetNZ policy .kiwi.nz will not actually go live until a minimum threshold of 500 domains has been passed, the company said.