BERL report - Protecting the consumer's interest
BERL report on consumer interest, competition and market concentration in the .nz market.
The Domain Name Commission has commissioned a report from Mark Cox at BERL regarding the health of the market for consumers in the .nz space following increased market concentration in the .nz registrar market. This follows a period of mergers and acquisitions in the .nz registrar space with a group of registrars sharing common upstream ownership now approaching around 40% of market share.
You can read the full report on our website.
Findings included that the rise in concentration in the market was not necessarily a bad thing. What matters most is the behaviour of the entities with high market share, and whether the behaviour is likely to lead to harm to consumers through higher prices and poorer quality services. It was stressed that where barriers to market entry by providers is low, those with significant market share will be deterred from abusing their market position for fear that competition will rise. It was also noted that the fact of common ownership is not necessarily destructive, depending on the owner’s approach, as sometimes the individual entities may continue to compete with each other.
BERL recommended that the Commission should focus on hearing the consumer voice, including deeply analysing the enquiries it receives. BERL also recommended that the Commission should seek out more information from service providers who deal directly with the ultimate consumers, for example, webhosting and IT service providers.
DNCL - our approach
Part of the our work program is to develop a more informed consumer base and we publish market data on average pricing and a table of the services that registrars offer. We also learn about, and respond to, registrar behaviour through registrant complaints and enquiries and observe trends in popularity of registrars as registrations fluctuate.
We continue to see new entrants join the market with five new registrars welcomed last year and two currently in the application process. We note that despite the increased concentration in the market there is no indication of a significant impact on annual domain name retail fees.
The desired market environment is covered in .nz policy and important aspects of the .nz space that we work to manage and enforce are that:
- There are low barriers to entry into the registrar market (currently 78 different registrar businesses are operating in .nz);
- There are measures that ensure that registrants can easily initiate transfer to an alternative registrar;
- There are bans on colluding on price; and
- Registrars agree to keeping registrants well informed about fees charged.
We will be using BERL’s recommendations to review what more we can do to protect consumer interests. Part of that review will include considering how we can build better data about the issues registrants bring to us, and examining whether there are issues that require a proactive systemic response rather than being addressed by a simple complaint and response approach.
There is further work we can do to ensure compliance with the .nz rules. We are currently working on creating E-Learning modules that will better educate registrars on the expectations in the .nz space and provide guidance to registrants about what standards they can expect.
Watch out for our blog coming soon that will discuss domain name pricing and fees.
For more reading see clause 3 of the .nz Principles and Responsibilities policy for the market we want.
The list of our registrars can be found on our website.