Class Action Lawsuits Filed Against SnapNames.Com
Class action lawsuits against domain name auction site SnapNames.com have been filed over the past few weeks after the company announced that a former employee was bidding against potential customers in domain name auctions. SnapNames -- which resells expired domain names and runs hundreds of auctions a day -- calls itself the largest resale marketplace for domain names. The class actions filed against it include persons and/or businesses that participated in SnapNames.com's online auctions. The lawsuits allege that a former vice president at SnapNames.com secretly bid on tens of thousands of domain name auctions over the past four years, leading to falsely inflated prices.
SnapNames.com, a subsidiary of Oversee.net, sent out notices last month that it had discovered an employee bidding on domain name auctions, and it is alleged that the employee participated in over 50,000 auctions. In its notice, SnapNames said the shill bidding affected about 5 percent of all its auctions since 2005, with most of the activity happening between 2005 and 2007. Some auctions in 2008 and 2009 were also affected, it said. The former employee won the auction in less than 1 percent of the cases, but was allegedly able to drive up the purchase price of the domain names by millions of dollars. Indeed, as a result of the internal employee bidding, the class action lawsuits allege the prices to purchase domain names were falsely inflated, leading to higher costs to buyers and greater profits for SnapNames.
If you or someone you know participated in an auction on SnapNames.com, please contact us immediately to discuss your legal options.