Warehousing

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Recommendation: Avoid
Avoid.jpg
Summary: Registrars hold onto expired domains for their own profit or use
Outcome: Conflict of interest, possibly registrar advantage
Addressed by ICANN Policy: N
Addressed by Legislation: N
Related to: no related articles at this time

According to ICANN, Warehousing or Domain Name Warehousing refers to "the practice of registrars obtaining control of domain names under their management with the intent to hold or 'warehouse' names for their use and/or profit."[1] Warehousing registrars do not drop expired domain names but instead keep them, sometimes to auction off or to maintain as parked domains, making them harder to obtain for registrants.[2][3]

Public Perception

While not prohibited, domain name warehousing is perceived as being unfair due to the registrars ability to hold on to names once the registrant has let them expire. Some Internet users view this as an abuse of the registrars' position, allowing them to make money without necessarily giving other interested parties a chance. It seems to give the registrar an advantage over the registrant.[1] At the moment, there does not seem to be much interest in debating or restricting warehousing, leading to the viewpoint that warehousing is perhaps vaguely undesirable but not a problem that needs immediate attention.

Outcome

The outcome of domain name warehousing is mainly that it creates tension between the registrar and registrant and can lead to a possible conflict of interest for the registrar.

Historical Use

  • The goal of domain name warehousing is to make money off of high traffic domain names that registrants let expire. If the registrar is able to keep these names instead of dropping them, they stand to benefit from utilizing Domain Parking to generate revenue or by simply holding the valuable names to sell for a higher price. [3]
  • As an industry example, registrar giant GoDaddy engaged in warehousing by using its subsidiary Standard Tactics, LLC, which it has since closed down.[3][4] In GoDaddy's case, if a valuable domain name did not sell at auction, it would be transferred to Standard Tactics where the domain would be parked to create a profit.[3]

ICANN Policy

ICANN currently has no policy on domain name warehousing. In the 2013 Registrar Accreditation Agreements (RAAs), the signing registrar agrees to abide by any consensus policy passed by ICANN that addresses warehousing.[5] However, such a consensus policy has not been agreed to yet[6] and was not labeled a priority in the negotiation of the 2013 RAAs.[1] It is also worth noting that ICANN does not have "a uniform policy concerning the handling of expired domain names."[7][8]

  • That being said, ICANN's Expired Registration Recovery Policy (ERRP), implemented in February 2013, may affect warehousing as it states that "any parking page hosted by the registrar at the expired domain name must include or point to renewal instructions."[9] This step is meant to help the user to re-register the expired domain if that is the user's intention.

Legislation

The U.S. government currently has no legislation addressing domain name warehousing.

DNS Award

Awardees work to mitigate mistrust between the DNS industry and registrants, including being conscious of possible conflicts of interest, such as those presented by warehousing.

Additional Resources

  • Read ICANN's 2013 RAA
    • Warehousing is addressed in section 3.7.9 under Registrar Obligations and again in section 1.3 under Consensus Policies and Temporary Policies Specification.
  • Add a resource here!

Related Articles

  • Another practice that may give registrars an advantage over registrants is Front Running.

References

  1. 1.0 1.1 1.2 Prohibit Domain Name Warehousing and Self-Dealing by Registrars by Seth Greene (March 7, 2012), ICANN
  2. What Is Domain Name Warehousing? (January 8, 2011), Domain Names Registrar (Australia)
  3. 3.0 3.1 3.2 3.3 Standard Tactics, LLC: How GoDaddy Profits from Expired Domains by Andrew Allemann (December 3, 2008), Domain Name Wire
  4. Go Daddy To Shut Down Standard Tactics, LLC by Andrew Allemann (December 17, 2008), Domain Name Wire
  5. 2013 Registrar Accreditation Agreement, Internet Corporation for Assigned Names and Numbers (ICANN)
  6. GoDaddy Uses Standard Tactics To Warehouse Domains by Robin Wauters (December 3, 2008), TechCrunch
  7. FAQs, Internet Corporation for Assigned Names and Numbers (ICANN)
  8. ICANN Fails to Deal With Warehousing & Registrars Conduct by Sarah Ptalis (August 24, 2009), Afternic.com
  9. Implementation of Expired Registration Recovery Policy (February 28, 2013), ICANN