In 2002, auDA -- .au Domain Administration -- introduced the "close and substantial connection rule", which allowed companies to register domain names that, although not derived from their own company or business name, are connected to their business in some way. For example, it would be acceptable for a real estate directory service to register names such as houses.com.au, apartments.com.au, land.com.au, estateagent.com.au.
However, on Friday, auDA issued a statement saying it is considering changing the rule after some companies were found to be "using this interpretation of the close and substantial connection rule to register large numbers of domain names apparently for the primary purpose of capturing Web traffic and/or selling click-through advertising".
"auDA is currently considering whether this practice is acceptable under the close and substantial connection rule. Until auDA has issued a policy clarification, registrants who engage in this practice should be aware that auDA reserves the right to delete the domain names for breach of policy," the statement said.
auDA's chief executive Chris Disspain recently defended the system by which popular domain names are allocated after extensive complaints on discussion lists over the fact several companies linked to an individual had scooped up several prime geographic domains in a recent ballot.
Disspain said he could "absolutely guarantee" the integrity of the system for randomly allocating commercial domains. "We've looked at it, and checked it, and there's nothing untoward going on," he said.
During a recent ballot of names associated with geographic destinations, one company, Aussie Destinations Pty Ltd, registered the most-popular domain in the ballot, perth.com.au, in competition with hundreds of other applicants. The company also managed to win the newcastle.com.au, darwin.com.au, casino.com.au and airliebeach.com.au domains. Aussie Destinations is owned by Jeff Marr, who runs Online Referral Networks Australia and the site personalinjurylawyers.com.au.
"What are the odds of winning 25 percent of the top 20 most sought after domains -- many of which had around 100 applications?" asked one member of a domain list.
While not wishing to comment on individual winners, Disspain said some entrants had established multiple businesses in order to increase the number of applications they could make.
Disspain said the rules of the ballot had been one entry per legal entity: "A company is a separate legal entity, so each can lodge an application... but 27 different companies...could put in 27 applications for one domain... That is one way of increasing one's chances".
It was also "entirely possible", according to Disspain, that a company that won a domain could transfer it to a sister company for registration.
Some entrants had won more domain names than Aussie Destinations in the ballot because the domains they had bid for had not been popular: "There were a lot of names for which only one application was received," said Disspain.
According to a recent posting on the same domain list, Marr recently purchased a swathe of domains such as chains.com.au, fork.com.au, cabinets.com.au, breakfast.com.au, buoy.com.au and station.com.au.