Double Red Alert: Domain Registrars Seek Power Grab To Deny Outgoing Transfers Of Legal Domains They Dislike

As I noted in a prior post on the weekend, there’s an important ICANN public comment period that ends on Tuesday August 2, 2022 regarding the transfers policy. It contains serious security flaws that would make domain name hijacking easier, by removing the ability to NACK the transfer after the transfer request has been initiated. I won’t be able to submit comments by Tuesday, and have asked that they extend the deadline.

However, in my research I came across another startling power grab by registrars (who dominate the composition of that working group), that was inserted into the recommendations.  Recommendation #19 at the bottom of page 32 of the report contains the following text:

ICANN Transfers Policy Rec #19

They propose to broaden the discretion of registrars to block an outgoing domain name transfer, from the limited “evidence of fraud” to the far broader “Evidence of fraud or violation of the Registrar’s domain use or anti-abuse policies.”

I had tweeted about this on the weekend:

https://twitter.com/GeorgeKirikos/status/1553576661995626496

and noted that it was “ripe for misuse”, since a use that one registrar forbids (politics, porn, casino, crypto, etc.) that isn’t illegal everywhere (like FRAUD) would trap a domain at that registrar (and ultimately lead to its deletion, if it couldn’t be renewed). A registrant couldn’t transfer the domain name to a registrar where that use is legal.

This is what happens when the working group is dominated by participation of registrars, without considering what the impact is for registrants. It’s one-sided and unbalanced.

Indeed, the transcript of that working group’s May 24, 2022 call is quite telling. [I literally stumbled upon that randomly this morning, while looking for something else]

On pages 15-16, Owen Smigelski of NameCheap (formerly of ICANN, and before that Sunrider — interesting lawsuit here that mentions him and also here) states:

But the rationale behind broadening the reasons for this denial is because evidence of fraud—fraud has a very specific definition. It means deceit of some type or trying to scam somebody or an illegal activity in there. It could be considered a very narrow definition. There are certain scenarios that might come up where a registrar might want to block the transfer for violation of terms of service.

So for example, Namecheap doesn’t want our services being used for hate speech but somehow somebody registers a domain name that’s hosting a Nazi website or a Holocaust denying website. Technically, that’s not fraud and we wouldn’t be able to block such a transfer. But if we wanted to, under our terms of service, which
says, you can’t post hate speech, we decided we want to block that transfer, we’d be able to do that as a material violation of our agreement as opposed to being forced to let somebody put something out there that us as a company does not want to escape further into the wild.

This is incedibly poor reasoning, indeed dangerous for registrants. It’s one thing to say “we don’t want you as a client”, but another thing to say “we’re going to prevent you from taking your domain elsewhere” over a dispute of the terms of service (as opposed to actual criminal activity).

While despicable, hate speech is legal in the United States. (Inciting violence isn’t legal, but hate speech itself is legal) Same goes for Nazi and Holocaust denying websites, at least in the United States (where NameCheap is based, and the jurisdiction of its registration agreement).

Volker Greimann immediately pushed back against that in the working group, saying (page 16 of the transcript):

I agree in principle but I think the language is a bit
too broad because simply put, a registrar can make anything a material violation of the registration agreement. We certainly have non-payment of fees in there. We have provision of incorrect registration data in there. We have all kinds of things that we consider a material violation of our registration agreement. And we might not want to have all of them be a reason for blocking a transfer. So I think we need to be a bit more specific. It’s hard [inaudible].

On pages 17-18 of the transcript, Mr. Smigelski brought up the concept of “guardrails”:

And Volker, I agree that that’s a concern and that’s why I want to put those guardrails in there and implementation note, which would be in a report and then, carried forward into an eventual policy to give some more guidelines on that. Happy to consider other wording to put that in there. I was just trying to give some flexibility to the registrars who might want to block for whatever reason. But also, at the same, making [inaudible] you didn’t cross a T properly, so we’re going to deny the transfer.

Yet, if you go back to the actual text in Recommendation #19 above, there are no guardrails! It’s just a pure power grab. Indeed, Mr. Smigelski literally said above “I was just trying to give some flexibility to the registrars who might want to block for whatever reason.”

Read that again! “…who might want to block for whatever reason.”

Zak Muscovitch (of the Internet Commerce Association, which is pro-registrant, but representing the Business Constituency (BC) in his participation in the working group; the BC  is essentially captured by trademark holders — i.e. it’s mostly a clone of the Intellectual Property Constituency) entered the debate on page 20 of the transcript:

This isn’t a hill that I would come close to dying on, but I’m just wondering, if there is a registrant that is violating a registrar’s domain use or anti-abuse policies or Namecheap’s anti-hate speech policies, that’s one thing. But let’s imagine a registrar that—because registrars can write in anything they bloody well want into a registration agreement. They can say that you’re not allowed to use a domain name for anything about the color blue. And so, someone’s using it for the color blue and maybe the registrar has the right to disable them from using the domain name at their registrar.

But if that registrar [sic — should be “registrant”] wants to move it to another registrar, that doesn’t have this policy, there’s another willing registrar, what’s the problem with the registrar of records saying, yeah, get the hell out of our registrar with that blue-related use of your domain name. If you could find someone else that doesn’t have that policy and tolerates it, by all means, it’s out of our hair. I think there’s an important distinction between permitting a registrant to use a domain name not one that’s registered in violation of one’s policies, but getting them out of there is a different thing.

With all due respect to Zak, it might be a “hill worth dying on” (although there are so many bad things coming out of ICANN, it’s tough to pick and choose!). It’s a very dangerous proposal. It’s being sneaked into the transfers policy recommendations, which few people are monitoring (because it’s supposed to be a “technical” working group), instead of having a broader debate in an anti-abuse working group (where the definition of “abuse” is very carefully monitored).

Let’s take a look at NameCheap’s registration agreement to see precisely what they consider to be undesirable:

You agree not to use the Services provided by Namecheap, or to allow or enable others, to use the services provided by Namecheap for illegal or improper purposes. As such, you agree not to:

  • violate the laws, regulations, ordinances or other such requirements of any applicable Federal, State or local government, including those that relate to privacy, data collection, consumer protection (including in relation to misleading and deceptive conduct) and applicable consumer laws in respect of fair lending, debt collection, organic farming (if applicable), disclosure of data and financial regulation;
  • transmit any unsolicited commercial or bulk email, not to be engaged in any activity known or considered to be spamming or Mail Bombing;
  • cause repetitive, high volume inquiries into any of the services provided by Namecheap (i.e. domain name availability, etc.);
  • infringe any copyright, trademark, patent, trade secret, or other proprietary rights of any third-party information;
  • use the Services for content that will profess hatred for particular social, ethnical, religious or other groups;
  • use the Services to distribute viruses, malware, abusively operating botnets, phishing, Trojan horses, worms, time bombs, corrupted files, or any other similar software or programs that may damage the operation of a computer or a person’s property;
  • contain warez; contain any kind of proxy server or other traffic relaying programs; promote money making schemes, multi-level marketing or similar activities; contain lottery, gambling, casino; contain torrent trackers, torrent Portals or similar software;
  • redirect to another website without their permission and/or to impersonate another person or company;
  • use for the purposes of impersonating another person or entity such as redirecting a domain to another website without permission and/or using a domain to send fraudulent or abusive emails;
  • use the Services in a manner that is violent or encourages violence;
  • violate the Ryan Haight Online Pharmacy Consumer Protection Act of 2008 or similar legislation, or promote, encourage or engage in the sale or distribution of prescription medication without a valid prescription;
  • use the Services for fraudulent or deceptive practices, counterfeiting or otherwise engaging in activity contrary to applicable law.

One can see immediately that it’s very broad (like most registration agreements at registrars). Note how the very first sentence states that it’s not just “illegal” purposes, but also “improper“, which is extremely broad and subjective. Indeed, NameCheap (or any other registrar granted such discretionary powers to block outgoing transfers) would presumably be judge, jury, and executioner, and wouldn’t rely on an actual court to make a decision.

I’m not going to go through every point in their agreement (since I already made the “hate speech” arguments above), but let’s take a look at the “spam” language, namely “transmit any unsolicited commercial or bulk email”. The word “any” is quite powerful (i.e. just 1 message is enough! How would domains of political parties ever survive, given how often their messages are marked as spam?), especially when combined with the fact that it’s not just your own behaviour as domain name owner that matters — one also needs to police “others” as per the very first line above.

Would a domain name like Gmail.com pass that test, given it allows others to send messages? Gmail.com is used by a considerable number of spammers. Of course, Google takes anti-spam measures seriously, but one could easily interpret that domain as being in violation of NameCheap’s agreement. Google is very powerful and would fight back, so NameCheap would never use that weapon against someone like them. Instead, they would tend to use that weapon against the less powerful. However, the less powerful are those that most need to be protected against misuse of such discretionary powers. Raise your hand if you’re less powerful than Google…(of course, Google doesn’t have Gmail.com at NameCheap).

How about the part about “redirect to another website without their permission” — would the famous Loser.com domain be trapped by such a policy? It has been redirected to numerous sites (like that of Al Gore), presumably without permission.

Actually, going back to the “hate” text, their terms are “profess hatred for particular social, ethnical, religious or other groups;” Would it be a violation of their agreement to say that you “hate spammers” or  “hate the New York Yankees and their fans” or “hate dumb lawyers in ICANN working groups with too much time on their hands”? Spammers, New York Yankees fans and dumb lawyers in ICANN working groups with too much time on their hands are certainly “groups” and thus fall under “other groups“.

How about the part about “infringe any copyright”? Any site with user-generated content regularly has challenges in that regard. But, you’re at NameCheap’s discretion. They simply want the power to go after the “bad guys”, to trust them not to misuse their discretionary power.

I think that the people we should mistrust are those who seek extraordinary and one-sided powers in the first place.

In conclusion, this report is replete with dangerous proposals that will harm registrants. An extension of time is needed so that the public can fully digest the report and submit high quality comments.