Introduction

Domain name registration plays a fundamental role in the digital ecosystem, ensuring that individuals, organizations, and businesses maintain unique online identities. Given the increasing use of domain names in commerce, intellectual property, and digital communication, it is imperative for domain name registrars to implement rigorous identity verification processes to ensure the legitimacy of domain ownership. Currently, many registrars rely predominantly on email-based verification systems to confirm domain ownership. This approach, however, is inherently flawed as it is susceptible to fraudulent activities, including the creation of fake email addresses, which undermines the integrity of the verification process. This legal analysis seeks to explore the obligations of domain registrars to ensure proper verification methods, especially through the use of identity documents (such as government-issued ID or other verifiable methods), and highlights the risks of insufficient verification practices.

I. Legal Framework Governing Domain Registration

The Domain Name System (DNS) and ICANN’s Role

The Internet Corporation for Assigned Names and Numbers (ICANN) is the global organization that oversees the Domain Name System (DNS). ICANN is tasked with maintaining the stability and security of the DNS, setting policies for domain registrars, and ensuring that domain registration practices comply with legal standards. ICANN‘s Registrar Accreditation Agreement (RAA) outlines the obligations of domain registrars, including their duty to verify domain ownership and manage the accuracy of registrant information.

ICANN’s Registrar Accreditation Agreement (RAA)

ICANN‘s RAA sets forth specific guidelines and requirements for domain registrars. One notable provision is Section 3.7.7.1 of the RAA, which stipulates that a registrar must verify the accuracy of contact information provided by the domain registrant. The registrar is required to confirm that the registrant’s details (such as name, email, and physical address) are legitimate. The RAA also mandates registrars to take action in cases where the information provided by the registrant is found to be incomplete or inaccurate.

The General Data Protection Regulation (GDPR)

The EU’s General Data Protection Regulation (GDPR) has had significant implications for domain name registration processes. While GDPR offers protection for personal data, it also requires data controllers (including domain registrars) to ensure that personal data is collected, processed, and verified in a lawful manner. Although GDPR limits the publication of registrant information through WHOIS databases, it does not exempt registrars from the responsibility to verify ownership and maintain accurate records.

Cybersecurity Laws and the Need for Strong Verification

Laws such as the Cybersecurity Information Sharing Act and various national cybercrime legislations underscore the importance of protecting domain ownership and verifying the identity of domain registrants to prevent misuse in fraudulent activities, phishing attacks, and other cybercrimes. Under these legal frameworks, registrars are expected to uphold practices that ensure the legitimacy of domain registrations to prevent malicious use of the DNS.

II. The Deficiencies of Email-Only Verification

The Vulnerabilities of Email-Based Verification

Email verification is widely employed by domain registrars due to its simplicity and cost-effectiveness. However, the reliability of email as a sole method of verification is highly questionable. Email accounts can be easily created using pseudonymous or temporary services, and email addresses can be forged or spoofed. As a result, relying solely on email to verify domain ownership opens the door for fraudulent individuals or entities to register domains under false pretenses.

The Risks of Fraudulent Registration

Fraudulent domain registrations pose significant risks, including impersonation of legitimate businesses, intellectual property theft, and cybercrime. In such cases, an email address does not provide a reliable method of verification, as anyone can register a domain using a fake or disposable email address. This scenario undermines the trust in the DNS and the integrity of the internet infrastructure. For instance, if an individual uses a fake email to register a domain for a phishing site, the registrar has failed in its duty to verify that the owner is legitimate.

Comparison to Other Verification Methods

Given the critical role domain ownership verification plays, more robust methods must be adopted. These may include, but are not limited to:

Government-Issued Identification (ID):

This is a standard practice in many industries, and it should be implemented by registrars for domain ownership verification. A government-issued ID, such as a passport or driver’s license, is verifiable, difficult to forge, and provides a clear indication of the registrant’s identity.

Two-Factor Authentication (2FA):

Incorporating multi-factor authentication methods, such as SMS or app-based 2FA, can help ensure that the registrant controls the email address and phone number associated with the domain.

Document Verification:

Registrars could request proof of address or business registration documents to further verify the legitimacy of the registrant’s claims.

Using email alone is akin to offering a printer to replicate sensitive documents like passports, where the potential for forgery or misrepresentation is high.

III. Legal and Regulatory Consequences of Insufficient Verification Practices

Duty of Care and Negligence

Domain registrars, like any service provider, owe a duty of care to their customers, to the general public, and to the broader internet community. This duty includes the responsibility to implement verification procedures that prevent fraudulent activity and ensure the integrity of the DNS. Failure to adopt appropriate verification methods, such as accepting email verification alone, could lead to allegations of negligence. If a registrar is found to have failed in its duty to properly verify domain ownership, it could be held liable for damages caused by any resulting fraudulent activities.

Potential for Legal Action and Liability

Affected parties, such as the legitimate domain owner whose domain was hijacked or the business harmed by a fraudulent domain registration, may seek legal recourse. Possible claims include:

Breach of Contract:

If a registrar’s failure to verify domain ownership leads to a fraudulent registration, the legitimate domain owner may claim that the registrar breached its contractual obligations under the RAA.

Tort Claims:

Affected parties could file tort claims for fraud, misrepresentation, or negligence against the registrar. This could be based on the argument that the registrar’s failure to verify the domain owner led to financial or reputational harm.

Intellectual Property Infringement:

Fraudulent domain registrations may infringe on trademarks or other intellectual property rights. Registrars could be held liable if they fail to verify domain ownership adequately before enabling the registration of a domain that conflicts with existing trademarks.

Discovery and Disclosure

If legal action is taken against a domain registrar for inadequate verification practices, discovery procedures could be employed to investigate the registrar’s internal processes and policies. Discovery in this context would seek to uncover:

Internal Verification Protocols:

The registrar’s documentation on its verification processes, including whether email verification was the sole method used, and if any additional methods were employed.

Incident Reports: Records of instances where fraudulent domain registrations occurred, including any complaints made by legitimate domain owners or instances of domain hijacking.

Compliance with RAA and Other Laws:

Evidence of whether the registrar complied with ICANN’s RAA, GDPR, and any other applicable laws and regulations.

Failure to provide adequate disclosure of these materials could result in sanctions or adverse inferences in court.

Penalties for Non-Compliance

Registrars that fail to meet their verification obligations under the RAA may be subject to penalties from ICANN, including the suspension or termination of their accreditation. Furthermore, non-compliance with GDPR could result in significant fines and penalties, including up to 4% of the registrar’s global annual turnover or €20 million (whichever is greater), as outlined under Articles 83 and 84 of the GDPR. Additionally, registrars may face civil suits for damages caused by their failure to verify ownership correctly, including claims for consequential losses.

IV. Conclusion and Request for Information

In light of the foregoing legal analysis, it is evident that email verification alone is insufficient to meet the security and legal standards required for verifying domain ownership. Domain registrars must adopt more secure and robust verification methods, such as requesting government-issued IDs or using multi-factor authentication, to ensure the integrity of the registration process and protect against fraudulent activity.

Request for Information:

The specific verification methods currently employed by the registrar to confirm domain ownership.

Whether the registrar has ever relied solely on email verification, and if so, the rationale behind this choice.

The registrar’s policy on the verification of domain ownership in cases of suspicious or disputed registrations.

Any documentation or records related to past incidents of fraudulent domain registrations and the registrar’s response to such incidents.

Failure to provide adequate verification processes could result in potential legal action, including claims for breach of contract, negligence, or intellectual property infringement. Registrars must prioritize compliance with ICANN’s RAA, GDPR, and relevant cybersecurity laws to avoid significant legal and financial consequences.

By Ricardo Baretzky PhD in Law | IRM, Int.Dip (BLAW)

BARETZKY & PARTNERS LLC

Risk Management Firm

www.baretzky.net