Shill Bids for Domain Names Made by Auction Company Exec, Suit Alleges
Shill bids for tens of thousands of domain names were secretly made by a former executive of the company that auctioned the domain names, a lawsuit alleges.
An unidentified former vice-president of SnapNames.com, which is a subsidiary of Oversee.Net, Inc., manipulated the auction and drove up prices for domain name purchasers by making the shill bids, contends a lawsuit filed today in Miami-Dade Circuit Court by the Cueto law firm. Cueto is seeking class action status for the suit, reports a PR Newswire press release.
“The domain name industry is the Wild West of intellectual property because it remains unregulated. The online community has been up in arms over what they feel has been an opaque system that just begs for transparency,” says attorney Santiago Cueto in the release. “It is impossible to know whether you are bidding against someone that isn’t working or affiliated with the company conducting the auction.”
The Miami practitioner tells IDG News Service that the lead plaintiff is his brother, Carlos Cueto, who owns about 3,000 domain names and has long suspected that some domain-name auctions weren’t being conducted fairly.
The news service says SnapNames.com announced last week that it had discovered the employee bidding, which took place in around 5 percent of its auctions since 2005:
The employee “set up an account on the SnapNames system under a false name and, under this name, bid in SnapNames auctions,” the company stated in a notice last week. “This is a clear violation of our internal policy and was not approved by the company.”
