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Comment by tantalor | Hacker News Reader

It's "unfair" to pay auction rates? How?

Why should the auction site get the domain to sell in the first place? A Romanian public asset is being basically dumped for 6 euros to a select group of private companies who then reap the rewards. It's not unfair between you and the other auction bidders, it's unfair between you and the auctioneer and the Romanian tax payer.

It is possible that there is enough auction sites created that the expected profit to the auction site is 0.

Economically, this is called rent-seeking behaviour. While perfectly legal, this feels unfair because the middleman adds no value whatsoever.

I'm not sure this really fits as rent-seeking. Usually, with rent-seeking, you manipulate either the political or economic landscape to give yourself a benefit without creating any value. In this case, resellers are taking advantage of a poorly designed system that was already in place to create a market for something that was being allocated stupidly.

And I think a key point here is that some form of this was inevitable. Even if they didn't set up the privileged API, you'd still have a glut of speculation, because that's what happens when you sell off a high value commodity below market. The only question is who is in a position to take advantage, and it doesn't seem from the article like resellers manipulated themselves into that position, so much as found themselves there by default.

>a poorly designed system that was already in place to create a market for something

So...an economic landscape?

Yes, but not one they manipulated for this end, at least as far as the we can tell from the information in the article.

They bought a reseller license for the purpose of snapping up and auctioning off high-value domains rather than acting like a traditional reseller.

Did they? Or did they do the same thing domain resellers have been doing for decades, with the only notable thing about this being that a bunch of more desirable domains came up for sale recently?

Domain resellers that have been caught doing this sort of thing in the past have also been criticized. In particular I remember a lot of criticism some time ago about the practice of watching for WHOIS queries to see what domains people are interested in, then buying the domain and trying to sell it back to the original searcher for more.

They have been criticized for that, yes, but I think undeservedly so. Fundamentally, I just think it's pretty dumb how we allocate domains in the first place, and that this sort of thing should be seen as the natural consequence of allocating resources stupidly.

As for the other thing, I think front-running is a pretty different situation, and is bad for reasons that don't apply here. Although I believe most of the legend of that came in part from a misunderstanding of what was happening. Some registrars would put a hold on the domain you searched for, which would automatically be released after a day or two. Their rationale was that it was a bad experience to search for a domain, and then have it snapped out from under you during checkout. Of course, it also conveniently prevented you from buying the domain from a competitor, and I have no doubt that that was part of the motivation for doing it. I agree that that's a bad practice, but true front-running is much worse.

It's a private entity that reaps the benefits of what is a public good presumably...

A domain name is a private good, not a public good.

Can you clarify what you mean by that? Would you say that ICANN "owns" all domain names, then sells them in bundles, making them private goods?

It's an excludible good in the economic sense, but the value wasn't created by the private company, but by the public WWW itself. This is classic rent seeking.

A domain isn't a private good until it's actually owned by a private party.

The exclusivity of the domain name is a public good. The right to use the domain name is a private, transferable good.

Were the auction site operated by Romania, the value of courses.ro would be determined by auction, paid by a willing buyer, and received by the Romanian polity. Instead, the Romanian polity receives 300EUR as an entrance fee to a race-track where luck is significant in determining the winner. There is nothing in the linked article suggesting that the number of entrants is limited.

Sure, just like the public's promise to keep off a chunk of land is a private good.

That's how our current system works, but it probably works that way primarily because the groups in charge wanted to raise money, not because it's a fundamental philosophical truth that it should work that way.

"A domain name is a private good, not a public good.... until it is sold (or rented) to person x, with the understanding that he can renew it forever if he follows a few rules.

Country ones are owned by the country - TLD's are a bit more unclear.

it's not private until it have an owner.

or are you normalizing the criminal behavior of godaddy where registrars can rush and buy the domain while you're doing the check out process just to sell back to you for more?

Citation for the GoDaddy claim?

OP is probably referencing domain front running. Basically when you search a registrar for an available domain, if the domain is available they'll put a 5 day hold on the domain, making it available solely through that registrar but not others. It forces the searcher to buy it through that one registrar if they want it. I couldn't find any direct evidence of GoDaddy doing it, but there's a lot anecdotal reports of them doing it, and it's confirmed that Network Solutions was doing this.

https://en.wikipedia.org/wiki/Domain_name_front_running

A comment in a previous discussion with some more information: https://news.ycombinator.com/item?id=4362961

Thanks. That's pretty lame but definitely not the same as buying up the domain and then raising the price. (Which would be shady but also probably a money-loser overall.)

The private entities I was speaking about are the auctionning registrar, the public good is the right to serve .ro domain (which should benedit Romanians at large).

Also, presumably the additional cost on the .ro ccTLD from the bots hammering the servers is burdening the Romanian citizen, and the benefits are going to the offending registrars...

Do you ask for real or just troll? It is unfair because, because the domain costs 6€ if you’re the middleman and 300€ otherwise. I guess €3000 is not a super high entry barrier, but probably there is some red tape as well.

you see the value of a good, buy it and then resell it at a better price so you can make a profit.

this is free market 101 as far as I'm concerned...

I can think of many times the "free market" causes unfair or immoral things, and I know you can as well, so why would you conflate the two with no other supporting argument?

If the Romanian government knew what it was doing, it would be auctioning these domains itself and capturing the proceeds. If something is worth $500 but the government will sell it to a sufficiently credentialed and capitalized buyer for $9, that's very nearly free money for the lucky auctioneers.

Can I buy it for 6EUR then, and resell it? No, I can't, so it's not a free market, is it?

it's an auction. I don't see the problem with that. But this is only to get the domain initially...after that, you pay the normal, reasonable price

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