Domain Names Australia Pty Ltd (DNA) and its director Chesley Paul Rafferty have been found guilty by the Federal Court of breaching the Trade Practices Act, following the company's re-registration mailout scam in 2003.
The court handed down orders yesterday stating DNA was guilty of "misleading and deceptive conduct", wrapping up the proceedings initiated by the Australian Competition and Consumer Commission (ACCC) late last year.
The ACCC accused the domain name registrar of breaching the Act by mailing misleading notices to domain name holders, which requested a re-registration of domain names that, in many cases, were very similar to the existing Internet domain names held by the recipients.
Officially, Justice Ray Finkelstein found that the DNA notices conveyed that the recipients' existing domain name had expired or was about to expire and required payment; that DNA was offering to renew the domain name account; and that the recipient was required to pay the amount stated in the notice to DNA to maintain the domain name registration.
Justice Finkelstein stated the deception was aided by many of the recipients lacking knowledge about Internet practices.
"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," said Justice Finkelstein.
He added that in circumstances where the recipient was a large firm, the notice was likely to be passed onto an accounts department that also may have little knowledge about the Internet.
The Justice found that DNA had breached section 52 of the Trade Practices Act and that Rafferty was involved in the contravention. He ordered that the company and Rafferty be banned from "engaging in future offending conduct of this nature" for a period of three years.
ACCC chairman Graeme Samuel welcomed the decision, saying the ACCC is "especially concerned to protect the interests of consumers and business that may be in a vulnerable or disadvantaged position".
"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," said Samuel.