TPP Domains breaches Registrar Agreement
auDA has found that TPP Domains Pty Ltd, an accredited registrar, breached the Registrar Agreement by permitting a change of effective control of TPP Domains to occur without auDA's prior consent.
The change of effective control of TPP Domains occurred when its shareholders entered into a call option deed with NetRegistry Pty Ltd . The call option deed gave NetRegistry the right to buy all the shares in TPP Domains, and until that right is exercised, to have control over the sale of those shares to any other person.
Registrar Agreements contain a provision which prohibits an accredited registrar from permitting a change of effective control to occur without auDA's prior consent. Such provisions are common in regulated industries, where the ownership structure or personality behind a particular contracting party is an important factor in determining whether the regulator enters into a contract with that party.
Within the context of administering the .au domain name system, this requirement permits auDA to have some level of control over the diversity of registrars within the competitive framework, and to ensure that there is transparency and a level playing field amongst registrars.
TPP Domains has acknowledged that it has breached the Registrar Agreement, and as it is required to do under the Registrar Agreement, has agreed to pay auDA's expenses resulting from the breach.