ICANN is considering eliminating private auctions for the next phase of the new generic top-level domain program. ICANN Board Member Alan Barrett made the announcement to the Generic Names Supporting Organization (GNSO) Council during ICANN 79 in Puerto Rico last Monday. Back in June of last year, ICANN's Governmental Advisory Committee (GAC) recommended that the corporation ban or find a way to " disincentivize" such auctions, and Barrett said ICANN is looking to implement that recommendation.
It should be noted that in the first phase of the new domain program, two different types of auctions were provided for in the event that multiple applicants applied for the same domain. During an ICANN auction, the winner's funds went to the corporation's budget. However, before this, the bidders could agree to hold a private auction. Based on its results, the amount offered by the winner was distributed among the losing participants. And it is no secret that some companies have successfully used such auctions to enrich themselves: the $185,000 paid for the application was more than recouped, considering that the winners shelled out millions and even tens of millions of dollars for the right to manage the domains they were interested in. In addition, there are suspicions that the bidders may have entered into secret deals among themselves, creating “joint ventures,” and bidder auctions also served as a way to transfer large sums from one company to another.
“We don’t know the answers yet, but what I can say is that we are looking at it and we are sympathetic to the idea of disincentivizing private auctions,” Barrett said. However, the author of the Domain Incite Kevin Murphy, reporting this news, is quite skeptical. He notes that the domain industry can be extremely resourceful. And if there is even the slightest opportunity to “exchange” an obviously doomed application for a new domain for a large sum of money, then there will certainly be someone who will take advantage of this opportunity.
