VeriSign is often criticised for acting as both registry and registrar. As registry, it controls the database for every domain name ending .com, .net and, for the time being, .org. Every seller of domain names – the registrars – must pay a fee to VeriSign for each name sold or renewed. Controversially, VeriSign also operates as a registrar – giving it a competitive advantage over other registrars.
The marketing campaign at the heart of the lawsuit began in April 2002. VeriSign sent "Expiration Notices" to domain name owners, including customers of BulkRegister, which had a "deadline" for reply of 15th May 2002, with the implication that the domain name was about to expire.
However, BulkRegister argues that there was no relation between the reply deadline and the actual expiration date of the domain. In a statement, the company said:
"The notice appears to be an invoice of $29 dollars to renew each domain, more than double BulkRegister's wholesale rates. The unsuspecting recipient would not only be paying significantly more money for a premature renewal, but would also be approving the transfer of their domain to VeriSign, which could result in loss of domain name service (DNS) services associated with the domain as well as differences in quality customer support offered by BulkRegister."
BulkRegister is seeking a temporary restraining order and injunction against VeriSign in a Maryland court. A hearing on the matter is scheduled for today.
In March, a similar marketing campaign led to accusations of illegal conduct against VeriSign by a smaller registrar, Go Daddy Software, although legal action was not taken. Instead, the President of the company, Bob Parsons, appealed to his customers to complain both to VeriSign and to ICANN, the internet’s supervisory body to which VeriSign is answerable.