The scandal erupted after .au Domain Administration (auDA) – the authority responsible for the .au web domain suffix – and its registry operator AusRegistry were accused of failing to pass on wholesale price cuts on web domains to business owners and consumers.
The accusations of price gouging, made in a story by The Sydney Morning Herald, claimed that “the owners of Australia’s more than three million domain names are being ripped off”.
Speaking with My Business, Cameron Boardman, CEO of the auDA, hit back at the allegations, saying there are a number of inaccuracies put forward, and that consumers and business owners are freely able to shop around for the best web domain registration package.
“The Age/SMH stated that, ‘The wholesale price of a com.au domain name is $14.95 every two years with domain names’. That is incorrect,” said Mr Boardman.
“The wholesale price currently paid by registrars is $17.50 (excluding GST) or $19.25 including GST for a two-year registration.”
He also said that retail pricing of website domains is “very competitive”, with a number of registrars competing in the market.
“The retail price is set by the registrars themselves, and there is in fact a very competitive market among registrars [of which] there are over 40 accredited,” he said.
“The pricing varies dramatically across the registrars and some registrars operate multiple brands with different levels of service. It is common for registrars to advertise domain names at below the wholesale price as a customer acquisition strategy. This is similar to the ‘loss-leading’ strategies that other retailers, including bricks and mortar retailers, deploy in order to attract new customers or grow market share.
Mr Boardman added: “Just Google ‘.com.au domain name registration’. Today, for example, there is a registrar offering domain names for $7.99 a year for a two-year .com.au licence.”
AusRegistry failed to respond to requests for comment.
It comes as the Australian Competition and Consumer Commission has taken legal action against two companies for allegedly scamming $2.3 million from unsuspecting businesses in a sophisticated domain renewal fraud.