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This is a guest article by Erhan Karabardak of Cooper Mills Lawyers.
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Domain Monetization and Regulation
Domain monetization often means different things to different people. The definition has evolved over time with the development of different business models. Members of the domain name industry consider monetisation to include numerous business models used to get a return from an investment, this could be affiliate advertising such as Amazon and Ebay, an ecommerce website, or simple parked pages.
auDA regulates domain monetization via the Domain Monetisation Policy (2008-10) (‘the Policy’). The Policy states that its purpose is to ensure that ‘domain monetisation is not used as a cover for cyber squatting or other misleading or fraudulent activity’. The Policy does not explain how it attempts to achieve this.
While people often complain about the Policy, the question needs to be asked, what is it that makes this Policy bad ?
Here are some of the reasons why the Policy is bad:
1. Apart from a brief unexplained policy basis, the Policy does not clearly articulate a reason for being, and a harm from which it seeks to ‘protect the world’;
2. There is inconsistency between this Policy and the Domain Name Eligibility and Allocation Policy Rules for the Open 2LDs (2008-05). The eligibility policy contemplates use of domain names for commercial purposes on the one hand (that is at the core of eligibility), yet on the other, the Domain Monetisation Policy (2008-10) prevents use of domain names for many commercial uses;
3. It effectively implements content regulation and censorship;
4. It restricts modern online business models;
At the core of complaints against the Domain Monetisation Policy (2008-10) are the restrictions in clause 4.3(a) and 4.3(b).
These read as follows:
4.3 In addition to their obligations under auDA Published Policies and the Registrant Agreement (domain name licence), domainers must comply with the following conditions of use:
a) the content on a monetised website must be related specifically and predominantly to the domain name; and
b) the domain name must not be, or incorporate, an entity name, personal name or brand name in existence at the time the domain name was registered.
These restrictions pose practical problems, here are some examples:
1. Mr G registered rubbishremovals.com.au today, and then places advertisements for rubbish removal service providers – while he would comply with clause 4.3(a) he would be in contravention of clause 4.3(b) as it incorporates, ‘an entity name, personal name or brand name in existence at the time the domain name was registered’. A search of the ASIC database indicates that there are 4 businesses / companies that were already in existence at the time the domain was registered. What makes this worse is that some of the businesses / companies are no longer in business, yet Mr G is in contravention of clause 4.3(b)
2. Miss A, a small business operator registers a domain name under the close and substantial connection rule to sell handbags on handbags.com.au, and then decides to place an advertisement for shoes and clothing on her website. By placing these advertisements (for example, for an affiliate), Miss A would be in breach of the Monetisation Policy, as ‘shoes’ and ‘clothing’ are not related specifically and predominantly to the domain name as required by clause 4.3(a);
It is evident that Domain Monetisation Policy (2008-10), while failing to prevent ‘cyber squatting or other misleading or fraudulent activity’, effectively prevents the use of domain names for many legitimate and lawful commercial purposes.
It pays to carefully consider how you use your domain names.
Please feel free to leave some comments.
------------------------------------------------------------
Domain Monetization and Regulation
Domain monetization often means different things to different people. The definition has evolved over time with the development of different business models. Members of the domain name industry consider monetisation to include numerous business models used to get a return from an investment, this could be affiliate advertising such as Amazon and Ebay, an ecommerce website, or simple parked pages.
auDA regulates domain monetization via the Domain Monetisation Policy (2008-10) (‘the Policy’). The Policy states that its purpose is to ensure that ‘domain monetisation is not used as a cover for cyber squatting or other misleading or fraudulent activity’. The Policy does not explain how it attempts to achieve this.
While people often complain about the Policy, the question needs to be asked, what is it that makes this Policy bad ?
Here are some of the reasons why the Policy is bad:
1. Apart from a brief unexplained policy basis, the Policy does not clearly articulate a reason for being, and a harm from which it seeks to ‘protect the world’;
2. There is inconsistency between this Policy and the Domain Name Eligibility and Allocation Policy Rules for the Open 2LDs (2008-05). The eligibility policy contemplates use of domain names for commercial purposes on the one hand (that is at the core of eligibility), yet on the other, the Domain Monetisation Policy (2008-10) prevents use of domain names for many commercial uses;
3. It effectively implements content regulation and censorship;
4. It restricts modern online business models;
At the core of complaints against the Domain Monetisation Policy (2008-10) are the restrictions in clause 4.3(a) and 4.3(b).
These read as follows:
4.3 In addition to their obligations under auDA Published Policies and the Registrant Agreement (domain name licence), domainers must comply with the following conditions of use:
a) the content on a monetised website must be related specifically and predominantly to the domain name; and
b) the domain name must not be, or incorporate, an entity name, personal name or brand name in existence at the time the domain name was registered.
These restrictions pose practical problems, here are some examples:
1. Mr G registered rubbishremovals.com.au today, and then places advertisements for rubbish removal service providers – while he would comply with clause 4.3(a) he would be in contravention of clause 4.3(b) as it incorporates, ‘an entity name, personal name or brand name in existence at the time the domain name was registered’. A search of the ASIC database indicates that there are 4 businesses / companies that were already in existence at the time the domain was registered. What makes this worse is that some of the businesses / companies are no longer in business, yet Mr G is in contravention of clause 4.3(b)
2. Miss A, a small business operator registers a domain name under the close and substantial connection rule to sell handbags on handbags.com.au, and then decides to place an advertisement for shoes and clothing on her website. By placing these advertisements (for example, for an affiliate), Miss A would be in breach of the Monetisation Policy, as ‘shoes’ and ‘clothing’ are not related specifically and predominantly to the domain name as required by clause 4.3(a);
It is evident that Domain Monetisation Policy (2008-10), while failing to prevent ‘cyber squatting or other misleading or fraudulent activity’, effectively prevents the use of domain names for many legitimate and lawful commercial purposes.
It pays to carefully consider how you use your domain names.
