While there are many rules and regulations aimed at providing an even playing field for buyers, sellers, and investors in the online space, sometimes there are practices that try to circumvent these rules. It’s unfortunate, but there are always some people looking for an extra edge, even if it’s dishonest.
Domain front running is one of those bad faith practices that could definitely cause severe trust issues between a registrar and potential domain buyers.
Does this practice still happen? Did it ever? There seem to be some strong conflicting opinions, but we’re going to look at the available data to see what we can learn about domain front running and how to avoid it.
Let’s get started!
What is Domain Front Running?
Domain front running is the practice of a registrar using inside information to purchase a domain name with the intent of selling it to an interested party for a larger amount down the line. Since investors or webmasters were using registrar search tools to look for domain names, the registrar knew what names they were interested in or had settled on.
The major concern from individuals looking to buy a domain name was that every time they searched for a good domain name on a registrar if they didn’t buy the name immediately they would come back to see the name already bought.
Then that domain would have a “For Sale” or landing page full of ads. The registration would be private with the registrar, and contacting a seller for a price would lead to a “premium price” that was far higher than when the name was available days before.
If that sounds like a slimy practice, it’s because it is.
In theory, this practice should have stopped in 2013, but there are varying opinions on whether this is the case or not. Why 2013?
Because that was the year that an amendment in ICANN’s rules expressly forbids the practice of front running by registrars.
This came after the infamous class action lawsuit against Network Solutions in 2008 after they admitted to a practice they claimed was not domain name front running, but which involved hiking prices and sounded to everyone else like front running. The case was settled in favor of the plaintiffs.
Why Do Domain Registrars Do It?
The short answer is for easy profit. A person looking for an available domain name can buy it anywhere. Some domain registrars have markups on domains, others sell domains at cost hoping to make money on other services.
If Domain A is available for $20 at one registrar, the investor can look around to see if they can find a sale or a better price. However, if the registrar “reserves” the domain name via front running it is only available from that first registrar.
If they put privacy on it and mark the price up to $99 then tough luck to the investor. The only place he/she can buy that domain name is from the first registrar for the new $99 price.
This is a very slimy practice, but it is profitable for domain registrars who engage in it.
Is it a Conspiracy? What Evidence Do We Have?
In theory, this doesn’t happen anymore. ICANN passed multiple regulations to make sure this stopped occurring and a registrar could get in serious trouble for doing so.
The problem is, it can be nearly impossible to determine if every registrar is in full compliance or not.
- Did domain name front running used to happen? Yes, absolutely.
- Does domain name front running still happen? In theory no, but we can’t be 100% sure.
Many domain investors believe this still happens. There are plenty of stories of “I looked up this domain and the next day it was gone and for sale.” The problem is that these are like old wives’ tales: there’s no way to know where they come from or verify them.
There are millions upon millions of domain names being bought each year. This means just by the math, sometimes two investors will have the same idea or search and one may act more quickly and “snipe” a name from an investor who waits.
Since most people use privacy with their domain purchases, and many domain registrars require it, there’s no way to see who actually bought the domain. That’s true whether it’s the registrar or an individual investor who had the same idea.
ICANN has run over 600 investigations and has not found a smoking gun, while outright dismissing several hundred of those investigations as being conclusive that there was no domain name front running involved.
While encouraging, it can be hard to convince someone who has experienced finding good domain names one day to see them gone the next that nothing nefarious took place other than plain old bad luck.
How To Make Sure You Avoid It?
Fortunately, there are ways to protect yourself from the practice of domain name front running. This way you don’t have to worry about whether or not it’s still happening, you can play it safe and get your domain names.
1. Don’t Talk About It Publicly
When a registrar takes search information and uses it to purchase a domain, that’s illegal. But if you brag about a great name you found and others hear, then go and buy it, that is completely legal.
Don’t talk publicly about any great domain names you’ve found. Especially before the purchase. That’s just asking to have it sniped away from you.
2. Don’t Do a Public Domain Search – Use Computer’s Terminal
When you use the search function of a registrar, they are actually reaching out to a registry database to get information on what is and isn’t available.
With the right software, you can do this directly using your computer. When you bypass the registrar’s search function, they have no access to the names you search for.
Domain Sherpa has a good step-by-step guide here on how to do this with any type of operating system. Using your computer’s terminal will keep all your queries safe.
3. Register Immediately
When you find a great name, don’t hesitate. If you purchase it immediately, there is no chance of someone getting in and sniping it away.
Register the name immediately and it’s there in your account until you’re ready to use it.
Takeaways
While opinions differ on whether or not domain name front running is still a thing, the history of this practice shows just how important it is to protect your ideas.
- Don’t blab about a domain name before purchasing it
- Use a computer terminal to look for domain names instead of registrar search
- Make the purchase right away
Following these three bits of advice will help make sure your best domain name ideas end up in your account where they belong!
