Hello Rikki,

>
> 
> I do not suspect I am alone in my opinion that they are being 
> misleading and deceptive and clearly in breach of the Trade 
> Practices Act.  I recall statements in the press that if auDA 
> doesnt do its job in self-regulation of the Internet, the 
> Government should step in.  Perhaps the ACCC needs to be 
> called in to act when auDA is not. 
> 
> Perhaps people unsure as to whether these organisations are 
> deceptive or not?  
> 
> In my opinion, they trick people into thinking they
> were the organisation through whom they initially registered 
> the domain name (partly due to their generic names) and the 
> person (often too busy to pay the matter much more attention) 
> simply signs the invoice.  
> 
> Another misleading aspect is that they do not put in the 
> invoice what the actual expiry date is.  The way domain names 
> work, you can have registered on 1 January 2001 for one year 
> and renew it on 2 January 2001 for another year.  So they 
> trick people into renewing when their domain name is not due 
> for expiry.  The critical thing is: they obtain customers 
> deceptively - since if you renew with them, you're likely 
> to stay with them (rather than bother changing to someone else).  
> 
> It looks to us like a scam and it doesnt look like anything 
> is being done about it.  Where is a press release / public 
> announcement / media coverage decrying this conduct?
> 
> I half suspect there will be a clarifying e-mail from the 
> auDA CEO following this post, so I'll leave it there for now. 
> 

I can't comment on the specific case that you refer to, but can make the
following general comments.

It is my understanding that you are referring to
misleading and disceptive conduct under the Trade Practices Act.

The Trade Practices Act is meant to be applied to every industry including
the domain name industry.

The ACCC is responsibible for ensuring that companies comply with the Trade
Practices Act.

I am not a lawyer, but I understand that to be able to successfully take
action under the act you would need to show
(a) that a consumer was actually misled (e.g they renew their domain name on
the mistaken assumption that they are dealing with their existing supplier)
(b) that a reasonable person reading the notice would be misled (ie the
consumer has read the notice carefully)

It is not enough for a domain name retailer to assert that another domain
name retailer is engaging in such conduct.  I am sure that in any
competitive industry, the ACCC gets many complaints from companies
complaining about their competitors.  The ACCC needs documented complaints
from consumers.

Quite often the wording of a renewal notice if read carefully is not
misleading.  There is a certain degree of buyer beware in any transaction
(ie a consumer should read a notice properly before entering into a
commercial transaction).  It is the lack of understanding of domain names in
the community and the companies that sell them that often allows simple
"renewal" notices to be successful.  For example if you received a notice
from a company that you have never heard of before to renew your mobile
phone contract for $100,000 you would either ignore the offer or inquire
further.  You would do this for two reasons - (1) you like to work with
trusted suppliers of mobile phone services, and (2) you have some idea of
how much a mobile phone contract should cost.

I recommend that when you come across an instance where you believe that
misleading conduct is occuring, that you get the affected consumer to
complain directly to the ACCC, with copies to auDA.  Melbourne IT also
alerts the ACCC when it becomes aware of practices which  may be of concern
to ACCC.

In regards to the role of auDA.  auDA should be aiming to not duplicate
existing law (e.g the Trade Pratices Act), nor should it try to duplicate
existing legal mechanisms for enforcing the law (e.g the ACCC).  However it
is appropriate that auDA work with industry to establish an industry code of
conduct, and require that domain name retailers comply with this code.  This
is what auDA is doing, and Melbourne IT strongly supports this approach.

With regard to appropriate ethical conduct, I personally believe that a
domain name retailer should make it clear when approaching a customer of
another domain name retailer that they are making a "new" offer to register
a domain name that is up for renewal.  The offer should explain how the new
offer is better than the current provider (e.g cheaper or better service) of
domain names.  This approach will foster legitimate competition.

It is unfortunate that information on current domain name holders and the
expiry dates of their domains names seems to be so freely circulated in bulk
form despite the efforts of Melbourne IT and auDA to limit access to such
information.

Consumer alerts issued in the past by auDA and ACCC have recommended that
consumers check the terms and conditions of offers to renew carefully.  It
seems that we need to continue to alert consumers in this way.
Unfortunately many consumers do not realise that it is in fact a competitive
industry already at the retail level, and the new model is aiming to improve
the competitive environment.  The present approach of the media to covering
domain name issues tends to imply that there is only one domain name
retailer (Melbourne IT), and some of the notices circulating around the
industry may lead a consumer to think that a company is acting directly as
an agent of Melbourne IT for facilitating renewals, rather than as a retail
competitor making a new offer.  Many with an understanding of the industry
would not be fooled by the notices (which includes most of those
contributing to this discussion list).   Hopefully we can work together to
improve consumer knowledge of the industry.

Regards,
Bruce Tonkin


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