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Vertical Integration of gTLDs Registries and Registrars Now Permitted

Elisa Cooper

While many were expecting a decision of strict Registry/Registrar separation, in an unexpected ruling, it was announced that ICANN will not restrict cross-ownership between Registries and Registrars. While the current set of agreements prohibits Registries from acquiring Registrars, they do not prohibit Registrars from applying for or operating TLDs. The Board Resolutions also made note of the fact that while individually negotiated contracts have included restrictions on Registry ownership of Registrars, cross-ownership provisions have varied over time and no formal "policy" on this topic has ever been recommended by the GNSO or adopted by ICANN.

The ruling comes as a major surprise to many, as using an ICANN-accredited Registrar for Registry Services had previously been expressly prohibited in the fourth version of the Draft Applicant Guidebook.

The decision also impacts existing Registries as they will be allowed to transition to the new form of Registry Agreement, except that additional conditions may apply.

It should be noted that the decision made has no impact on the continued requirement for Registries use of ICANN-accredited Registrars for the registration of domain names.

Undoubtedly, the resolution represents a significant change in the way in which the domain name ecosystem operates.

By Elisa Cooper, SVP Marketing and Policy at Brandsight, Inc.
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