ICANN has introduced two significant bans in the upcoming new gTLD application process, targeting practices considered as “gaming.” These changes aim to promote fairness and reduce confusion in the domain name industry.
Key Changes Introduced by ICANN
1. Ban on Private Contention Resolution:
• ICANN has prohibited applicants from privately negotiating payments to competitors for dropping out of contention for the same domain string. This practice, common in the 2012 application round, often involved private auctions where the losing party received a financial payout for withdrawing their bid.
• With this new rule, contention sets will now be resolved primarily through an ICANN-administered “auction of last resort.” This approach ensures transparency, as ICANN will retain the proceeds from these auctions rather than private entities benefiting financially.
2. Ban on Coexistence of Singular and Plural gTLDs:
• ICANN has also decided to prevent singular and plural versions of the same domain string from being awarded simultaneously. For example, if two separate applicants vie for .podcast and .podcasts, both will enter the same contention set, and only one version will be approved.
• Additionally, new applications cannot include singular or plural equivalents of existing gTLDs, blocking any attempt to introduce similar variations that could lead to end-user confusion.
• This measure is expected to curb defensive registrations and prevent applicants from exploiting marketing efforts made by competitors who hold similar singular or plural domain names.
Rationale Behind the Bans
The bans were proposed following recommendations from ICANN’s Governmental Advisory Committee (GAC). The move aims to reduce “gaming” of the system, where companies in the previous gTLD round made substantial profits by leveraging private auctions. ICANN’s decision seeks to create a level playing field and reduce consumer confusion by limiting the coexistence of visually similar gTLDs.
Impact on the Domain Name Industry
These changes represent a significant shift from the policies of the 2012 application round, where private settlements were not only allowed but often encouraged as a way to resolve domain contention. In that round, some applicants earned millions by strategically withdrawing from contention after private auctions.
• For Applicants: The new rules may increase competition and lead to higher auction prices, as applicants can no longer negotiate private deals. The “auction of last resort” could become a key element in deciding the outcome of popular domain string applications.
• For ICANN: By collecting all auction proceeds, ICANN may see a substantial increase in funds, which could be reinvested into the organization’s activities or domain name system development.
• For Consumers: The elimination of singular and plural gTLD coexistence aims to minimize user confusion, making it easier for consumers to navigate and understand domain name offerings without encountering similar-looking extensions.
Conclusion
ICANN’s recent decisions mark a step towards increased fairness and transparency in the new gTLD application process. By banning private settlements and addressing the issue of similar domain strings, the organization aims to create a more competitive and clear landscape for both applicants and end-users. These measures are likely to impact the strategies of domain investors and companies preparing for the next round of gTLD applications.
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