Cut-throat competition and auction begins for new gTLDs

Symbolique brevetsThe Internet revolution is at its peak with the advent of new generic top level domain names. The possibility to register new gTLDs opens new avenues for significant trade and economic prospects. Internet stakeholders are engaged in a raging battle to secure the most promising gTLDs.

In this ferociously competitive setting, it is not uncommon that a TLD is coveted by several applicants. A string contention then occurs, where two or more applicants successfully pass the stages of the evaluation process for domain names, which are identical or similar.

Module 4 of the ICANN’s New gTLDs Applicant Guidebook provides that the String Similarity Panel identifies contention sets.While identical gTLDs will automatically be assigned to the same contention set, similar gTLDs will only be placed in the same contention set when this similarity is such that it may create probability of confusion thus impacting the visibility of the gTLDs.

When such a string contention occurs, the applicants are invited to reach an amicable settlement. If they are unable to do so, the Applicant Guidebook provides for an auction as a means of last resort allowing to distinguish between applicants for a gTLD string belonging to the same contention set.The winner will then be able to proceed to the stage of contract execution, subject to meeting the requisite criteria.

An auction was held on September 17 in a view to resolving string contention sets for three new  gTLDs:the <.buy>, <.tech> and <.vip> gTLDs, which were sought by 4, 6 and 5 applicants respectively.During the auction which was facilitated by Power Auctions LLC, an auction service provider appointed by ICANN, Amazon won <.buy> for $ 4,588,888, while Dot Tech LLC acquired <.tech> for $ 6,760,000 and <.vip> was secured by Top Level Domain Holdings for $ 3,000,888.

The sums at stake are indicative of the high level of competition, which piques internet stakeholders and the economic significance attributed to the new  gTLDs.

The auction system is a recent one: as at 17 September, only one auction had taken place, on June 4 this year, Beijing Tele-Info Network Technology Co. LTD won the <.信息> gTLD for $ 600 000.Auctions will take place every month until March 2015. For instance, 108, 134, 106 and 208 applicants are competing for the <.law>, <.sucks>, <.music> and <.forum> gTLDs respectively…Nonetheless, it is unlikely that all of the above mentioned applicants will be participating in the auction: while some will voluntarily withdraw themselves, others will be evicted during the more extensive evaluation phases.

It is noteworthy that the significant proceeds from these auctions have not yet been assigned to any particular purpose; the proceeds collected will therefore be separated from the traditional proceeds of ICANN. It remains to determine how they will be used.