Wineries May Lose Internet Domain Dispute

Regional associations worry extortion is inevitable if .wine and .vin domain names go online

by Paul Franson
Groups opposing the domains .wine and .vin argue that unscrupulous operators might reserve names relating to regions like Napa Valley and hijack potential customers to sell them other wines.
Marina del Rey, Calif.—It appears that wine companies may suffer collateral damage in a policy dispute between European agencies and the United States over control of the Internet.

Specifically, European agencies want to loosen the grip that the U.S. nonprofit Internet Corporation for Assigned Names and Numbers (ICANN) has on assigning Internet generic top-level domains (gTLDs) such as .com and .gov.

There have been less than a dozen such TLDs (other than those for countries), but ICANN proposes to create hundreds more, including .wine, .vin and .vino for use by wine interests.

However, regional wine associations in the United States and European wine regions object to the suffixes to Internet addresses unless safeguards are included to prevent misuse of the domains.

“It could be extortion,” noted Rex Stults, head of government relations for the Napa Valley Vintners, one of the regional groups opposing the new suffixes.

He notes that companies might have to reserve not only basic names like Mondavi but variations like MondaviWine.wine, RobertMondavi.wine, MondaviEstates.wine and likely spend heavily to protect their interests.

In addition, unscrupulous operators might reserve names relating to regions like Napa Valley and hijack potential customers to sell them other wines.

U.S. wineries are not alone in their opposition.

“We will pass from 20 domain names to a thousand, and this will pose risks for brands, companies, local authorities,” said Riccardo Ricci Curbastro, president of European Federation of Origin Wines. “We feel that we are witnessing the establishment of a globally organized extortion scheme,” he said in a statement.

Esther Dyson, the famed tech observer, venture investor and founding chair of ICANN, agrees. “I think (and have said elsewhere) that this is basically a protection racket.”

Eight noted American wine regions have banded together to oppose the gTLDs, including the Oregon Winegrowers Association (545 wineries), the Napa Valley Vintners (500 wineries), Sonoma County Vintners (230 wineries), Willamette Valley Wineries Association (200 wineries), Paso Robles Wine Country Alliance (160 wineries), the Santa Barbara County Vintners’ Association (150 wineries), the Walla Walla Wine Alliance (75 wineries) and the Long Island Wine Council (48 wineries).

Collectively the groups represent nearly 2,000 wineries, and they join the European wine regions that are also concerned.

Intertwined with politics
The influential California-centric Wine Institute has long advocated to protect place names in the United States and internationally, and leaders believe the new domain names must accurately represent the origins of wines in all of the world’s markets.

The Wine Institute objected to a 2013 proposal by the EU to control use of the names. However, in a June 20 letter to Stephen Crocker, ICANN’s chairman, the Wine Institute said it has no problem with the .wine and .vin domain names, but is opposed to a plan that would give European interests the ability to control who gets to use the word wine globally.

“We strongly object to any policy that would lend official support to the idea that specific countries or regions would have special authority” over such issues, Tom LaFaille, the Wine Institute’s director of international trade policy, said in that June 20 letter. ICANN’s government advisory committee had suggested giving “certain nations or regions” control over Internet usage of the proposed new domain names.

In 2013, the European Union proposed that it solely control who could use .wine and .vin to protect the EU terms of geographic significance—also known as Geographical Indications or GIs. Wine Institute spokesman Nancy Light said, “While reasonable GI rules have benefits, the EU system has evolved over the years to a scheme that can 1) establish inappropriate GIs, 2) restrict competition and consumer choice, and 3) confiscate private property rights for the benefit of a limited number of EU producers.”

The Wine Institute has taken the position that decision-making authority over the new domain names must be nondiscriminatory, and it joined the United States, Australian and New Zealand governments in objecting to specific countries having special authority over how the word “wine” and “vin” are used in the Internet’s addressing system.

In May, California U.S. Rep. Mike Thompson of St. Helena sent a letter to ICANN, asking that .wine and .vin domain not be assigned to “any applicant,” provided that worries concerning protections against cybersquatting can’t be resolved.

Another California Democrat, Rep. Anna Eshoo, sent ICANN a letter with the same request and asked that the two wine-focused gTLDs “be permanently withdrawn from consideration.”

They’ve also asked the U.S. National Telecommunications and Information Administration (NTIA) to delay or permanently stop the issuing of these domain names.

The Napa Valley Vintners noted in a news release, “of special concern in these discussions is an incorrect and misleading statement by the NTIA’s senior telecommunications policy advisor and U.S. advisor to ICANN’s Governmental Advisory Committee, Suzanne Radell, that it is ‘just three U.S. wineries out of thousands and thousands’ that are objecting to issuing of the .wine and .vin gTLDs while addressing ICAAN’s public meetings held in London last week. The coalition of American quality wine regions representing nearly 2,000 U.S. wineries clearly contradicts Radell’s testimony in London on June 22.”

The origins of .wine and .vin
One obvious question is, “Who wants the new domains?” They may stem from simple greed.

ICANN proposed adding the TLDs to foster competition and provide alternatives to scarce .com designations, but the specific offerings seem to result from companies like Donuts.co, which was founded in 2011 by industry pioneers with the business model of registering domains, then licensing them out. It was backed by more than $100 million in institutional capital during its first funding round and more in the second. These registrars pay $185,000 for the rights to rent out the domains.

Other proposed new TLDs include .beer, .vodka and .coffee.

“You could probably attribute the application more to our business model—though we used a lot of data in deciding to apply for each, including anticipated demand,” noted Mason Cole, vice president of communications and industry relations at Donuts Inc. “We started with more than 3,000 candidate names and whittled the list down to the 307 for which we eventually applied.”

Donuts applied to ICANN for 307 top-level-domain names in 2012.

The company’s marketing materials state: “Donuts.co is similar to its biggest competitor, Verisign—a registry with a few old TLDs such as .com and .net. It is also a registry but has more than 100 new TLDs such as .services, .expert and .email. Our TLDs are specific to a large number of verticals such as general business, sports, hobbies and leisure, personal expression, occupations, shopping and e-commerce, travel and regional, community and religion, and many other interests and categories.”

Donuts, being a “registry,” is required by ICANN to only sell names via “registrars” such as GoDaddy, 1&1.com, eNom, Tucows and many others. It does not license specific URLs like wine.com.

“We did apply for .wine and .vin,” added Cole. “We’re the sole applicant for .vin, so will eventually operate that TLD. There are two competing applications for .wine—a situation known as a “contention set”—and we expect to go to auction in order to secure that name.” DotVinum is one competing applicant for .wine.

No one applied for .vino.

Neither .wine nor .vin is live yet. Unlike the U.S. government, “The French government has fairly strenuously objected to the existence of these TLDs, so their progress became hung up for a bit. We’re confident now, though, that each will move forward. I don’t have an anticipated time for you in terms of launch. We do think it will likely be before the end of the year,” concluded Cole.

Even so, one potential register, United Domains, claims 10,671 preregistrations. Another registrar advertising .wine is eNom.

Wine Institute spokesman Nancy Light says that the organization is not aware of anyone pushing for the wine domain names now but, “Our understanding is that they will move forward with disposition,” she said.

East Coast editor John Biggs of Techcrunch, a leading technology news network, agrees and forecasts bad news for wineries, too. “There’s no precedence for removing the domains. They will never go away, no matter how much the affected industry whines.”

Another technology observer, Techcrunch writer Alex Wilhelm, said that there’s one thing wineries can take comfort in: The new domains may not prove significant. “It’s somewhat incredible how many gTLDs there are now. And how small their impact appears to be,” he concluded. 

Posted on 07.11.2014 - 09:20:39 PST
Do brands get hijacked now? Even though .wine does not yet exist, are there false URLs for brands using .net, .biz, .info etc.? There might be a few fake URLs, but it's not likely to become a major threat.
Larry Chandler
Cedar City, UT USA

Posted on 07.11.2014 - 12:05:34 PST
All these arguments could be levied by any industry associated with any gTLD, new or old. This is all about control by the big guys over the little guys. I believe the .wine and .vin domains will open up opportunities for Mom and Pop wineries that otherwise can't get an identifiable or branded domain name for their business.
Doug Barnett