Vertical integration and lock-in

[Carlos A. Afonso]

Well, I think when a business is under no regulation regarding price
policy affecting the consumer / final user, the fact that it owns its
distributors or not does not preclude arbitrary price hikes, except that
there will be one less point of pressure against price increases if the
business absorbs its distributors (the other pressure point being the
final user).

There are two countervailing elements depending on where the final user
lives:

- her/his country has strong consumer protection laws;

- the user will make sure there are renewal clauses in the contract with
the registrar which preclude unreasonable price increases and / or
establish a cap for eventual increases.

Regarding the second element, I have never seen a contract when I
acquired a gTLD domain name...

frt rgds

--c.a.

Milton L Mueller wrote:
> Here's a response to something Wendy said in the meeting:
>
> Wendy - my concern, and milton doesn't seem to get this, is the market definition problems of every domain is a monopoly for those who have locked themselves into ownership of a domain name and want to keep it resolving. We can do all sorts of market analysis for what the market looks like to a newcomer, but we haven't for what it looks like for when you are already a registrant and the registry has complete power over you. I hope that will be part of the discussions.
>
> Wendy, as long as there is no price cap on the registry, it doesn't make any difference whether there is vertical integration or separation. An opportunistic registry could bump up their wholesale price from $5 to $500 as long as there are no price caps, and independent registrars (if they existed) would be forced to pass those costs along. An uncapped registry could do that whether or not they were separate from the registrar. Therefore, the issue you are concerned about relates to price caps on registries - not registry vertical integration, or cross ownership and joint marketing.
>
> Do you get that?
>