ICANN renders ‘domain tasting’ unpalatable

The Hindu recently carried an extremely interesting article by T. Ramachandran on how ICANN has made the practice of ‘domain tasting’ unpalatable for those who were abusing it. As most of you may know ‘domain tasting’ refers to the practice of whereby a person or company registering a domain name is allowed an ‘Additional Grace Period’ (AGP) during which he can judge the traffic towards the domain name. If the person is not satisfied with the domain name he can return the domain name to ICANN and get a full refund of the registration fee. One of the other reasons for having a five-day AGP was also to allow a person to correct a spelling mistake that may have crept into the registered domain name. It must be remembered that registering domain names was not always as cheap as it is today. In the good old days it could cost almost $35 dollars to register a domain name.

However, as always, the additional ‘grace’ period had to be disgracefully abused. The modus-operandi used to be as follows:

Companies/persons would register those domain names which spelt similar to popular domain names, popular misspellings or generic names. Advertisements would be placed on these websites through programs such as Google’s Ad-Sense program and in the five day ‘grace’ period people visiting the website through the domain name would end up clicking on the advertisements thereby generating revenue for the domain owner. Once the 5 days grace period lapsed the domain would be returned for a full refund thereby generating a tidy little profit for the domain taster.

The problem with domain tasting, apart from the ethical angle, is that it deprives genuine users the use of the domain, as very often once a domain is dropped by one taster it is picked up by another taster who will then circulate it to another taster. Since the entire process is carried out by automated bots it costs the taster hardly anything. The dead-weight loss for society however is higher.

In order to combat the practice of ‘domain tasting’ ICANN came up with the following solutions: 1. They first decided to stop refunding the transaction fee of $ 0.20 if more than a certain number of domain names were returned by the same company. 2. Consequently ICANN increased the penalty to the cost of registering the domain name. Both these measures combined have resulted in the domain name returns decreasing by almost 99.7%.

This is an interesting model of how internet governance and how ICANN has managed to successfully adapt itself to face a new problem. In other news I’m glad to note that the Government of the United States has finally granted ICANN some measure of independence.

Read the story of ICANN’s independence over here.
Read the Wikipedia entry on domain tasting here.
Read the ICANN press release on domain tasting here.
Read the Hindu story on domain tasting here.

Prashant Reddy

Prashant Reddy

T. Prashant Reddy graduated from the National Law School of India University, Bangalore, with a B.A.LLB (Hons.) degree in 2008. He later graduated with a LLM degree (Law, Science & Technology) from the Stanford Law School in 2013. Prashant has worked with law firms in Delhi and in academia in India and Singapore. He is also co-author of the book Create, Copy, Disrupt: India's Intellectual Property Dilemmas (OUP).

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