Class Action Challenges System Of Registering ‘Net Domain Names

LOS ANGELES (CN) - A class-action lawsuit accuses Network Solutions of fraudulently "trap(ping) consumers into paying its grossly inflated domain name registration fees" through its Web site on which customers can search the availability of domain names. "Unbeknownst to consumers, Network Solutions immediately registers for itself any domain name that consumers provide to Network Solutions in order to determine whether the name is available," the suit states.

The class-action complaint continues: "Network Solutions never informs consumers that it has registered the domain name for itself; instead, Network Solutions tells consumers that their domain name is 'available' and offers to register the domain. It is only at this point - after it has secretly registered the domain for itself - that Network Solutions finally reveals what it will charge," the suit states.

"Consumers cannot register their domain name through any of Network Solutions' less expensive competitors because their chosen domain is unavailable through any other service - which (unbeknownst to the consumer) is now held exclusively by Network Solutions - who is now offering to sell the domain name to anyone will to pay its grossly inflated registration fee. Consumers, therefore, are held hostage: they can either pay what Network Solutions demands or risk that someone else will and steal their domain name."

Represented by Kabateck Brown & Kellner, lead plaintiff Chris McElroy also sued the Internet Corporation for Assigned Names and Numbers. He says, "A consumer cannot directly register and manage their domain name information with ICANN. Instead, consumers must utilize a domain name registrar to have his or her domain name registered and managed with the appropriate domain name registry. A domain name registrar is a company accredited by ICANN to register domain names in the domain name registry.

"The Shared Registration System (SRS) is a central system that allows all accredited domain name registrars to equally access, register and control domain names. Before the creation of the SRS in 1999, Network Solutions had a monopoly in the operation of the most important domain name registries (including .com, .net and .org) and was therefore the only domain name registrar. With the creation of the STS, Network Solutions' monopoly ended," so it allegedly employed this sneaky way to do its business, as domain names "are assigned on a 'first-come-first-served' basis," the suit states.

McElroy says he discovered the alleged fraud by trying to register kidsearchnetwork.com with Network Solutions, which told him the name was "available" and would charge him $34.99 a year for it. McElroy says he went to another registrar, GoDaddy, to look for a better deal, but "GoDaddy, however, informed Plaintiff that the domain name that he was attempting to register - and which Network Solutions informed was available just minutes earlier - was unavailable," because Network Solutions had just registered it.

McElroy says he was forced to register through Network Solutions, and that "GoDaddy would have charged only $9.99 to register the same domain name."

Plaintiffs seek disgorgement and damages for fraudulent concealment, aiding and abetting and unjust enrichment, and an injunction.

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