The US Federal Trade Commission (FTC) is investigating a recent
domain name marketing campaign conducted by web address provider
VeriSign, according to a report by Reuters. The investigation
appears to be focusing on the company’s practice of transferring
and deleting domain names, and then sending “renewal notices” to
customers of rival registrars in a marketing campaign that ended in
May 2002.
It is reported that the FTC is also investigating VeriSign’s
relationship with Interland, a web hosting company which re-sells
VeriSign domain names.
In March 2000, VeriSign and Interland announced that they would
be widening the scope of an existing agreement between them, for
the marketing of VeriSign domain names and security products, to
hosting small and medium-sized businesses.
Two competitors, whose customers received renewal notices from
VeriSign, have alleged that the company’s direct mail campaign was
aimed at deceiving customers into switching to VeriSign. They
raised an action against the company for “deceptive business
practices” and have already won a preliminary injunction.
Two further lawsuits have been filed by a class-action lawyer
but the cases have yet to be heard.
According to the Reuters’ report, a spokesman for VeriSign would
not comment on the investigation itself but did state that the
company intends to co-operate fully with the FTC.
