Largest new TLD applicant commits to resolve up to 63 new TLD contention sets through first private auction.
Donuts, the company that applied for the most top level domain names, announced today that it will commit to private auctions for 63 of the 307 strings that it applied for in the first auction to be held by Applicant Auction.
Private auctions allow new TLD applicants to settle contention sets faster than waiting for ICANN’s “auction of last resort”. They also allow the proceeds to be distributed to the losing bidders rather than to ICANN.
For the Applicant Auction designed by Peter Cramton, the law firm of Morrison & Foerster will act as a “neutral” for legal and settlement functions and JP Morgan Escrow Services will provide escrow. The Applicant Auction web site says the first auction is scheduled for May 28, although Donuts’ press release says it will be June 3.
Some new TLD applicants claim that private auctions may violate antitrust rules, although other applicants have said these claims are just a PR stunt by companies that don’t want to participate in private auctions.
In order for a private auction to work, all applicants for the string must voluntarily participate in the auction. So applicants that don’t like private auctions simply don’t have to participate. However, some applicants may worry that competitors will be enriched through private auctions, giving them more money to compete on other strings.
There will be a lot of strategic thinking by all applicants as to which domains they want to have private auctions for.
Donuts’ press release and list of 63 strings is available here.
[This story was updated to reflect that the 63 strings committed refer to the “first” auction held by Applicant Auction.]