DNS: Message From KO/Office

DNS: Message From KO/Office

From: <mark.hughes§ccamatil.com>
Date: Thu, 26 Dec 1996 19:56:30 EST
DISCLAIMER] I'm not a lawyer, and anyone should check with a real
legal eagle before acting on any of the following:

As Melbourne IT is offering a commercial service for registering
.com.au domain names, I believe they would be subject to the Trade
Practices Act.  The prime objective of the Trade Practices Act is to
foster and promote competitive markets by declaring certain types of
anti-competitive business conduct to be illegal.

There are three principal Parts to the Act:

Part IV, entitled Restrictive Trade Practices, specifies conduct
which is either illegal of itself or illegal if it has the purpose
or likely effect of substantially lessening competition.

Part IVA, entitled Unconscionable Conduct, prohibits unfair conduct
by a company in connection with the supply of goods or services to

Note that this part may not apply to the domain name administration
service if it is not really a service to consumers.

Part V, entitled Consumer Protection, prohibits a number of business
practices that are prejudicial to consumers.

Note that this part is generally aimed at consumers and may not
apply to the domain name administration service.

Part IV comprising section 45 to 50 seems to be the part that would
apply to domain name administration services.  Once there are
multiple domain name administration services, then the following
sections may become relevant:

Section 45: Contracts, arrangements or understandings that restrict
dealings or affect competition
Section 47: Exclusive dealing
Section 48: Resale price maintenance
Section 50: Prohibition of acquisitions that would result in a
substantial lessening of competition.

While the Melbourne IT domain name service is a monopoly situation,
Part IV Section 46 - Misuse of Market Power - appears to be the
relevant section.

Section 46 prohibits an organisation which has a substantial degree
of power in a market from taking advantage of this market power for
any one of the following purposes:

a) eliminating or substantially damaging a competitor
b) preventing the entry of a person into any market
c) deterring or preventing a person from engaging in competitive
behaviour in any market

Item b) may be relevant:
For Melbourne IT to force everyone to renew for one or two year
periods without offering to refund money on a pro-rata basis for any
domain names that wish to change to an alternative service could be
construed as a misuse of market power by locking in existing
customers to prevent the entry of a competitor into the domain name
administration market.
The penalties that can be imposed for breaches of the act are severe
and can be imposed on both the organisation and its employees.  The
existing penalties for a breach of the Competition Law Provisions of
the Trade Practices Act are up to $10 million for an organisation
and $500,000 for an employee.

Those employee penalties would take quite some time to repay on an
academic's salary]

DISCLAIMER] I'm not a lawyer, and anyone should check with a real
legal eagle before acting on any of the above.

Regards, Mark

 * * * * * * * * * * * * * * * * * * * *
*  Message From : HUGHES, MARK          *
*  Location     : AUSTRALIA-CCA HDQ     *
*  KOMAIL ID    : N17503  (CCAMCQN1)    *
*  Date and Time: 12/27/96  11:56:15    *
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Received on Mon Dec 30 1996 - 11:18:13 UTC

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