Following revelations that a SnapNames.com, Inc. employee had acted as a shill bidder to manipulate bids in domain name auctions conducted by Oversee.Net, Inc. (SnapName’s subsidiary), SnapNames has been hit with a class action lawsuit.

The lawsuit, filed in the Miami-Dade County Circuit Court on behalf of lead plaintiff Carlos A. Cueto and others who participated in SnapNames’ online auctions alleges that a former vice-president of SnapNames.Com used a false account name – “Halvarez” – to secretly bid on tens of thousands of domain name auctions over the last four years, driving up costs for other bidders… and generating greater profits for SnapNames.

The class action lawsuit, brought by the Cueto Law Group law firm, is the first lawsuit alleging that a domain name provider used a shill bidder to manipulate its online domain auctions.

It may well be the first of many. The lawsuit – and certainly the publicity over the SnapNames situation – is attracting some much needed scrutiny to online domain name auctions.

We actively participate in domain name auctions and, incidentally, found ourselves outbidded by Halvarez on a number of occasions. Meanwhile, we have noticed a strange pattern of behavior occurring on another company’s online domain auctions. Stay tuned…

This entry was posted on Tuesday, November 10th, 2009 at 5:33 am and is filed under Domain Names, Feature, Law. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.