Domain Squatting: Everything You Need To Know

domain-squatting

You have an established brand and trying to create a website. But you find out that the domain you want is occupied. If your brand name is very specific and not just a regular word, the domain name might have been occupied by domain squatters.

In this article, I'll talk about what is domain squatting, how it works, how squatters profit from this activity, as well as how to protect your business name.

What Exactly Is Domain Squatting?

Domain squatting, or cybersquatting, is a practice of buying TLD (top-level domains) domains with the intent of profiting from trademarks/brands/names that belong to someone else. Cybersquatters try to get domains that incorporate or sound like already established brands or famous names with the motivation of selling them to the real brand owners.

Additionally, a domain squatter might also purchase common misspellings of well-known websites (sometimes referred to as typosquatting) hoping that random internet users will land on their website and click on their ads. A perfect example of a commonly misspelled popular website would be something like 'Faceboke' rather than 'Facebook'. 

domain squatting example

Here's a cybersquatting definition for better understanding: imagine that your friend creates an online brand - CoolOnlineBrand. And in this case, being a terrible friend, you buy the CoolOnlineBrand.com domain for, let's say, $10/year. Then, you contact your friend and offer to sell that domain to them for $3000.

Cybersquatting is different from buying a domain and selling it to the highest bidder on auction sites because of the difference in intent. Auctioning a domain is a legitimate way of making money. Domain squatting, on the other hand, is more similar to blackmail and extortion.

Is domain squatting legal?

Legal status of cybersquatting highly depends on the region.

A handful of countries have put in place laws and regulations to govern domain squatting. In Australia, individuals are required to have a direct connection with the domain names they are interested in registering. 

In the US, the federal-state safeguards users from cybersquatting using federal law known as the Anticybersquatting Consumer Protection Act.

Other countries have come up with their own unique laws to curb domain squatting. If you have reason to believe that you're the victim of domain squatting, report the issue to the relevant governing body in your country. 

Some domain authorities include:
- ICANN in the United States
- CIRA in Canada 
- auDA in Australia

domain squatting icaan

However, even if your country has a law against cybersquatting, the process of proving and getting the domain back is usually long and with lawyer intervention.

How Do Domain Squatters Profit?

So, you probably know that the only thing cybersquatters are after is money. There are two main ways to profit from squatting: through domain resale and from ads.

Through ad placing

domain squatting ppcMany domain squatters place ads on specific websites they own. I am sure you've had the experience of mistyping a site address only to be redirected to a website with lots of Yahoo or Google advertisements, rather than being sent to a legitimate website. That was probably a squatted domain.

Squatters conduct thorough research on new companies, especially those looking to expand their operations to other countries and purchasing their equivalent domain names in those countries. For example apple.com.au, or apple.com.nz. They also buy commonly mistyped domain names such as googel, or googal.

Websites like these will get traffic from users who type the site name wrong, so squatters put PPC (pay per click) ads to score profit.

Through domain resale

The other way domain squatters make a profit is by reselling already acquired domains to the highest bidder.

The industry of registering domain names is based on a first come, first served basis. This means that whoever got the domain, will most likely hold the rights to it. And that can prove to be very frustrating for any individual who would like to build a high-quality site with a memorable domain name.

A lot of people were unable to register their domain names simply because domain squatters had already bought them. Similarly, people also lose domains to squatters because they were unable to renew them on time.

And the moment they decide they're ready to pay a premium for it is the moment domain squatters make their money. 

A domain squatter will overprice the given domain name since they know there will be a high demand for it.

Most of the time, providers of domain names may choose to protect certain high-quality domain names upon realizing that there will be a high demand for them. They place then high price tags on premium domains and ask buyers to get in touch with them directly if they are interested in buying the domain.

How to Reclaim and Protect a Domain Name

Keep in mind that the process of reclaiming a squatted domain is not easy. Most people are forced to re-purchase their domain names from squatters to regain full control of their domain. 
However, if you can prove that you have a legal trademark to the domain name that's been taken, you can involve the services of ICANN (in the USA) to help speed up the process of reclaiming your squatted domain. 

However, be aware that the reclamation process through ICANN is not quick and follows several steps. For this reason, you might want to hire an experienced attorney to help you reclaim your squatted domain.

Here are some tips on how to avoid squatters and protect your business name:

1. Buy a domain name for your brand instantly. Always buy a domain name before establishing your social media presence. Even if you don't plan on building a website, register your name to avoid squatters.

2. Always renew your domain registration on time. Squatters are always on the lookout for domains that have a near-expired registration. To avoid someone snatching your domain name, make sure your subscription is valid.

3. If you got squatted - seek legal help. If you can prove that the squatted domain is a trademark infringement, seek legal help. While it may take a long time for the case to be solved, trademarks are very well protected by the law - giving you a real chance of regaining control of your domain.

Domain Squatting: Illegal, Annoying, Bad for Business

Domain squatting is becoming more and more of a problem. Squatters place ads on squatted domains or sell them on to the highest bidder. In most cases, people lose domain names when they fail to renew them right before their expiry date arrives. All of this can severely hurt your business.

Reclaiming a squatted domain is not easy unless you are ready to re-purchase your premium domain name from a squatter. But remember, you can involve the services of a regulatory authority such as ICANN. 

What's your experience with domain squatting? Have you experienced it first hand? Comment down below!

An experienced content professional with a creative mind. If I'm not writing, you can probably find me in the backyard playing with dogs or at some weird art show.

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