auDA – is this “insider trading” by a Registrar?

Last Friday, the rare premium two-letter domain name ic.com.au dropped, but hardly anyone noticed.

Did you see that it was available to bid on?

Domainer was inundated with complaints that ic.com.au looked to be deliberately hidden and buried at the very bottom of Drop.com.au‘s daily drop list. Even when you searched for “ic“, you would expect ic.com.au to appear near the top of the search results, yet you had to scroll all the way to the bottom to find it.

Guess who “acquired” it? 

Guzzini Pty Ltd – a company whose Directors are David Warmuz’s parents. The same David Warmuz that owns Drop and Netfleet. 

Previous complaints from clients of Drop about Guzzini’s activities (on Drop) resulted in David Warmuz confirming that Guzzini would not be permitted to use the platform. This was a couple of years ago.

Obviously things have changed.

The fox seems to be back in the henhouse.

Questions:

To auDA: Is this type of activity permitted under Clause 19.2 of the Registrar Agreement? Is Drop as a sole dropcatcher effectively enriching itself, its “affiliates” or “related entities” at the expense of ordinary registrants?

To David Warmuz and Anthony Peake: Can you not see how bad this looks? Why have you rescinded your previous undertaking about Guzzini? Where is the transparency?

31 thoughts on “auDA – is this “insider trading” by a Registrar?

  • Avatar
    March 29, 2021 at 1:49 pm
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    Of course it is insider trading. Guzzini has an advantage over any other client of Drop. Warmuz and Peake obviously think they can get away with all sorts now that they are the only drop catcher. It is abhorrent behaviour, and it will come back to haunt them.

    auDA, don’t sit on your hands this time.

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  • Avatar
    March 29, 2021 at 2:31 pm
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    If a real estate agent let his father win a property on a silent auction for an undisclosed price, other buyers would quite rightly have cause for concern and complaint to the governing regulator. That’s why licensing bodies have such strict compliance requirements for realtors.

    Drop could place a $100k bid on a name for Guzzini, thus locking out any other bidders. Under the current lack of transparency, no one would know the amount paid.

    Hey Dad, scored us another one for reg fee. 🙁

    Bring on another drop catcher is what I say.

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  • Avatar
    March 29, 2021 at 2:53 pm
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    That is not a good look. If the domain is excluded from an electronic search or sort, there must be code that allows that exclusion to happen. It is a concern that that act is even possible. Clearly Drop wanted no competition on the bidding. I hope auDA takes a good look at this. What checks are being done on the bid process?

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  • Avatar
    March 29, 2021 at 8:50 pm
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    I’m curious if anyone could actually manage to place a bid on this or was it locked out to a really high bid amount.

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    • Avatar
      March 30, 2021 at 9:52 am
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      Good question Peter. I obviously watch the drops every day, religiously, and I didn’t see this domain name until AFTER the auction had ended, and only because a fellow domain investor texted me, asking what was going on with it? I searched for it and it was buried at the bottom of the drop list and the bottom of a search for “ic”…. and then, more complaints came in to Domainer about this domain… and then… we all saw who secured it…

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  • Avatar
    March 30, 2021 at 4:08 am
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    Please keep sooking. Then auDA will take over the drops and start doing 30 day auctions where domain names go to the best buyer (often an end user) instead of to domain investors.

    Sooner or later every domain name ends up in the hands of an end user.

    The domainer’s place in the value chain is making sure the name goes to the best end user (determined by best price offered). But this place can easily be done away with by auDA if it handled the expired auctions itself and extended them to 30, 60 or even 90 days.

    auDA might even choose to bank generic or dictionary word domain names up for 1-2 years, then do one big auction as it did in 2002.

    So by all means keep sooking.

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    • Avatar
      March 30, 2021 at 9:55 am
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      Yeah, okay “Charlie”… we’ll all stand by and do nothing then. At one point we had three drop catchers… Now we have one. It’s clear that we desperately need another one.

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      • Avatar
        March 30, 2021 at 11:26 am
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        “Desperately” ?

        There’s no money in it Rob, otherwise you would’ve done a drop catcher yourself?

        The reason there is no money in it is that good names are not dropping any more.

        There’s a certain point where even the bluntest IT guy now knows that a .com.au domain is worth more than the initial registration cost and a lot more than online auto-appraisal sites spit out. So no one is letting good names go, and there are fewer stuff-ups resulting in deletion.

        There’s a certain point on the Monopoly board where every good property is taken, and everyone has passed ‘Go!’ several times .. What comes next? Does one keep circling the board like a fool, hoping to land on the last utility? Or is it better to develop what you’ve got and start doing deals?

        Consolidation time. The number of .com.au ‘domainers’ will halve over the next 4 years. The best names and portfolios will go to those who are able to achieve the best selling prices. Fortunately you are one of them. But those who don’t learn to sell better will be sayonara.

        So should the focus be on what a drop catcher is or is not doing? Or should it be about stripping great names from weak hands who won’t be here in 4 years time?

        You tell me

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        • Avatar
          March 30, 2021 at 11:58 am
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          If there’s “no money in it” I wonder why Trellian just dropped one million dollars in buying up Netfleet?!

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          • Avatar
            March 30, 2021 at 12:04 pm
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            Netfleet’s value had nothing to do with it being a drop-catcher. The number one asset is the customer database.

            Hope this answers your question.

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            • Avatar
              March 30, 2021 at 12:08 pm
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              (The above -and below- is my opinion)

              To elaborate, Netfleet, while yes it was a drop catcher, has thousands of account holders, many of whom were interested in aftermarket transactions. It is that database that is truly valuable.

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            • Avatar
              March 31, 2021 at 8:07 am
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              $1 million for the small Netfleet customer database? Really?

              How is that claim calculated?

              It looks more likely the price and takeover took out a previous duopoly drop catching competitor to become a total monopoly with tiered fixed pricing guaranteeing drop.com.au the entire expiring .au domain name business.

              Drop / Trellian also cancelled all the pre existing paid for Netfleet customer / consumers potentially competing .au valuable backorders…that again will give Drop awareness and more profits on those names.

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              • Avatar
                March 31, 2021 at 10:14 am
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                Most fish and chip store owners wouldn’t understand how a customer database could be worth $1m, that’s why they are fish and chip store owners

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                • Avatar
                  March 31, 2021 at 2:00 pm
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                  I wonder if the owner of Queenslandfishing.com.au owns a fish and chip shop.

                  They must be a valuable Netfleet customer as they have the name listed for sale on Netfleet for 15,000,000.

                  I though their were rules around using registrant info for marketing purposes by registrars. But then regulations for auDA registrars have no meaning as the regulator is incapable of self regulation where they are concerned. Take .org.au for example.

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          • Avatar
            March 30, 2021 at 12:21 pm
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            LOL! I think you have “Charlie Warmuz” on the hook Rob.

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            • Avatar
              March 30, 2021 at 1:00 pm
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              Possibly.

              If it is you David, please feel free to explain what happened, and if you think it’s okay for you to be doing the types of things we’ve been discussing above.

              My ultimate aim with everything on Domainer has always been and continues to help make our industry transparent, fair, and, hopefully, to build more trust and value in our Australian domain name ecosystem.

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  • Avatar
    March 30, 2021 at 6:17 am
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    I saw it, but yes, it was glitchy in the list.
    The belief that, ultimately, someone on the inside would win it turned out to be right….it doesn’t feel right committing big $$ on the drop platform, only for someone to see my bid and then edge me out by $1 anyway 🙁

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    • Avatar
      March 30, 2021 at 9:57 am
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      I’ve missed dropped names in the dying few seconds that don’t seem right. I can’t trust that certain people aren’t getting “looked after” who are associated with Drop. And there is absolutely no way anyone, including auDA, can tell.

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  • Avatar
    March 30, 2021 at 6:58 am
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    Has anyone reported this to other authorities like ACCC?

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  • Avatar
    March 30, 2021 at 7:09 am
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    I really hope David has a good explanation for this. It’s hard to view this any other way than a flagrant manipulation of a monopolistic platform with absolute disregard for the registrar rules to solely benefit themselves.

    And it comes at the direct expense of Drop customers, which is just self destructive.

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    • Avatar
      March 30, 2021 at 10:01 am
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      Well said Luke. This is happening against THEIR OWN CLIENTS. Manipulation happened with Company.com.au(,) and possibly with Help.com.au(,) and now with ic.com.au(…) There are other domains too that people are concerned about. All anyone wants is a “fair” and transparent system. We obviously need competition too. It’s turning into a dark time in the trust of Australian domain names.

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  • Avatar
    March 30, 2021 at 7:11 am
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    auDA will do nothing. There will be no statement, no breach notice, nothing. auDA created a monopoly and we are seeing the consequences. auDA are failing as a self regulator once again.

    Everyone in the industry is aware of the relationship between Trellian, Fabulous, Drop, Guzzini and recently Netfleet. The auDA board has no members with domain industry experience and thus no knowledge, (except Angelo, who is a registrar and has a conflict of interest where registrars are involved and is powerless to act). No industry knowledge on the board is a failure of the Nominations Committee and the lack of transparency in appointing board members.

    On the other hand the auDA chair was also the chair of ASIC so he should be well aware of what constitutes a “related entity”. Failure to act will be a failure of management. Stakeholders want answers and transparency, which includes all stakeholders and not just an announcement in a member newsletter.

    The board needs to be held accountable. It is time for the next government review.

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  • Avatar
    March 30, 2021 at 8:17 am
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    In the interests of transparency, the folks at Drop.com.au should consider a self referral to the ACCC. Investigators at the ACCC are very good at determining whether or not the conduct of a monopoly, or people running a cartel, that potentially touches the lives of most Australians, is lawful, fair, equitable and in the public interest.

    If the listing of the domain was placed in a different way to any other domain name, and the buyer was provided with some advantage not available to all other members of the community, there could be grounds to consider ASIC launching an investigation into whether or not the staff, owners, corporate entities or agents engaged in deceptive or misleading conduct in that the market of that domain was presented as a normal part of trading when in fact it was not. Deceptive or misleading conduct need not be intentional.

    Self referral would be ideal but anyone can seek an investigation from ASIC or the ACCC and that might be more effective than seeking help from AuDa.

    Who knows, AuDa procedures and practices might come under scrutiny during and after any investigation by federal authorities.

    The foundation of all trade on commerce in this country are Australian digital assets. ASIC and the ACCC would welcome a referral or a self referral.

    It is not defamatory or even unlawful to seek assistance from federal authorities when there is a prima facie case that something does not look right.

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  • Avatar
    March 30, 2021 at 10:20 am
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    More effective competition in the drop catch space for .au is very much needed. Having a single provider who dominates the space is a monopoly and the way the pricing is structured and the type of auction has an effect of skewing the sale prices.

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  • Neddy
    March 30, 2021 at 11:46 am
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    As I’ve said many times on here, I like David Warmuz – and I admire him for what he has achieved in the domain space over many years (particularly overseas).

    However, there are different rules in com.au as opposed to dot com. A registrar in Australia (or a related entity) cannot purchase domain names unless it is for their registrar business. Whereas there is no such rule in dot com (GoDaddy is one of the biggest portfolio holders). Now maybe with com.au there is some legal way of structuring entities to avoid getting into trouble with the regulator. I’m yet to see one though!

    But regardless of the above, the perception of Guzzini winning domains on the Drop platform against long standing clients is simply a bad look. It erodes confidence in the system – particularly when there is currently no transparency in the bidding process (and I do understand this is soon to change).

    Hitting the reset button for the good of all

    In my opinion, David would be well served in taking two simple steps:

    1. Without any admission of fault, acknowledge it isn’t a good look, and commit not to allow Guzzini (or any other associated or related party) to bid any further on Drop;

    2. Make a gesture of awarding IC.com.au to the highest bidder (after Guzzini). For disclosure purposes, I was not a bidder, but I know someone who did bid.

    Ned

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  • Avatar
    April 1, 2021 at 9:42 am
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    I first came to know about Guzzini a year ago when I was privy to a similar incident. I was told this would not happen again. I expected it might but I thought a new entity would be created at the very least and not blatantly using Guzzini again. That part doesn’t make sense to me. Unless it was a stuff up it’s hard not to imagine the higher powers at Drop didn’t think there would be an uproar.

    I saw the domain pushed to the bottom of the list but it seemed on that day many were not ranking higher because the search and cpc metrics were not displaying properly (I have a screenshot). I’m not sure whether I agree this was done on purpose, as I picked up what I think is a much better domain for $5,000 a few weeks before. Nevertheless, it’s a terrible look overall. If auDA won’t get involved we need more transparency urgently.

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  • Avatar
    April 1, 2021 at 11:01 am
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    What happens when a lot of the 2 letter domains start to drop because of the new rules. I know of at least 20 that are ineligible. Will Guzzini or another Trellian related company pick them up. Drop will make a fortune out of them anyway as they have the monopoly on drop catching in australia. You would expect most would go in the 5,000 to 10,000 range, maybe more. Then there are the direct reg options.

    Couple of examples. How much do you think they are worth?
    ac.com.au
    dd.com.au

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    • Avatar
      April 1, 2021 at 12:13 pm
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      im not fussed about Drop making 5k or 10k or even 50k on a name. its still wholesale. if u dont like it dont bid

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      • Avatar
        April 1, 2021 at 12:35 pm
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        Sounds like a dictator saying, “if you don’t like my rules, you can get out of the country”. Meanwhile, the people may have different plans.

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  • Avatar
    April 1, 2021 at 11:14 am
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    It is a sad indictment on auDA as the regulator of the .au namespace that they are incapable of regulating their accredited registrars of which there are few.

    How can a registrar renew a domain name whose registrant became deregistered nearly 20 years ago. It makes a mockery of self regulation and demonstrates how registrars fail to apply the rules correctly. And the new complaints process will be handled by the registrars. Are you concerned?

    Domain Name: AC.COM.AU
    Registry Domain ID: D407400000001567699-AU
    Registrar WHOIS Server: whois.auda.org.au
    Registrar URL:
    Last Modified: 2020-03-31T00:15:05Z
    Registrar Name: Web Address Registration Pty Ltd
    Registrar Abuse Contact Email:
    Registrar Abuse Contact Phone:
    Reseller Name:
    Status: serverRenewProhibited https://afilias.com.au/get-au/whois-status-codes#serverRenewProhibited
    Status Reason: Not Currently Eligible For Renewal
    Registrant Contact ID: R-018576839-SN
    Registrant Contact Name: Sam Hadzajlic
    Tech Contact ID: C-007154241-SN
    Tech Contact Name: AC Solar
    Name Server: D.NS.BUDDYNS.COM
    Name Server: NS1.AC.COM.AU
    Name Server IP: 46.101.133.194
    DNSSEC: unsigned
    Registrant: HADZAJLIC PTY LTD
    Registrant ID: OTHER 083139440
    Eligibility Type: Other

    Name: HADZAJLIC PTY LTD
    ACN: 083 139 440
    ABN: 18 083 139 440 (External Link)
    Registration date: 25/06/1998
    Next review date:
    Former name(s): BLUE PLANET NET PTY LTD
    Status: Deregistered
    Date deregistered: 15/12/2002

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  • Avatar
    April 1, 2021 at 1:05 pm
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    Nepotism is never a good look. This is bad PR for Trellian.

    Domain investors memories are long. Look at the overseas platforms who got too big for their boots over the past decade or so. Look at Netfleet from a few years back. People look for and crave transparency. A new player in the drop catching market in Australia would definitely be attractive to those disappointed by the current smoke and mirrors of a monopolistic player.

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