The Federal Court today handed down orders following an earlier finding that Domain Names Australia Pty Ltd and its sole director, Mr Chesley Paul Rafferty, had breached the Trade Practices Act 1974.
The Australian Competition and Consumer Commission began proceedings against Domain Names Australia Pty Ltd and Mr Rafferty in October 2003 alleging, amongst other things, that the company had breached the Act by sending out misleading or deceptive notices inviting the recipient to register a particular internet domain name. In many cases the name referred to in the notice was similar to the recipient's existing internet domain name.
Specifically, Justice Finkelstein found that the form of notice conveyed the following false representations:
- the registration of the recipient's existing domain name had expired or would expire if payment was not made by the 'Return Date'
- Domain Names Australia Pty Ltd was offering to re-register or renew the recipient's existing domain name
- the recipient would be required to pay the amount mentioned in the notice to maintain the registration of his existing domain name.
In handing down his decision, Justice Finkelstein observed that "many [persons] who receive the notice will know very little about the Internet and the use and registration of domain names. These recipients will include first time users of the Internet and unsophisticated Registrants of domain names".
He further observed that in circumstances where the recipient of the notice was a large organisation equipped with an accounts department or the like "there is a greater risk that the reader [the person in the accounts department] will have little or no knowledge about the Internet, the registration of domain names, or the fact that it is possible to obtain registration of very similar domain names".
Judge Finkelstein declared that Domain Names Australia Pty Ltd had breached section 52 of the Trade Practices Act and that Mr Rafferty had been involved in this contravention . He also made orders restraining the company and Mr Rafferty for a three year period from engaging in future offending conduct of this nature.
ACCC Chairman, Mr Graeme Samuel welcomed the decision.
"This decision is important as it recognises that the notice sent by Domain Names Australia Pty Ltd had the likely effect of misleading persons in such a position of disadvantage or vulnerability in terms of their inexperience with the internet and the use and registration of domain names.
"The ACCC is especially concerned to protect the interests of consumers and business that may be in a vulnerable or disadvantaged position".
An example of the type of notice is below.