Contending Applications Best Practices for Auctions and Private Deals

In the 2026 round of the new gTLD program, contending applications are once again expected to be a significant aspect of the domain delegation process. Contention arises when two or more applicants submit proposals for identical or confusingly similar strings, and the applications cannot all be approved. These contention sets must be resolved before any of the conflicting strings can proceed to delegation. For applicants, the path to resolution typically involves either ICANN-facilitated auctions or privately negotiated agreements. Understanding the nuances of both approaches and adopting best practices is essential for navigating this competitive and often high-stakes process.

Once contention sets are formally identified by ICANN following the string similarity review and publication of all applications, affected parties are notified and encouraged to resolve disputes among themselves if possible. Private resolution methods are strongly favored by ICANN, as they allow applicants to avoid the adversarial nature and unpredictable outcomes of auctions. Private deals can take many forms, from joint ventures and partnerships to outright buyouts or application withdrawals in exchange for financial compensation or equity stakes in related ventures. These agreements must be carefully structured and fully documented to comply with ICANN rules, which prohibit arrangements that circumvent the public interest or involve improper influence over multiple applications.

Applicants engaging in private resolution must ensure that any financial transactions are transparent and legally sound. Drafting of agreements typically involves specialized legal counsel with experience in domain name transactions, as the stakes can be substantial. In the 2012 round, private contention set resolutions frequently reached values in the seven- or even eight-figure range, particularly for commercially attractive strings such as .app, .blog, and .shop. These high-value transactions underscore the need for rigorous due diligence, clear terms regarding rights transfer, and well-defined timelines for application withdrawal and any post-delegation collaboration.

Private resolution is not without risk. Agreements can break down if one party fails to follow through, or if regulatory or legal hurdles arise after terms are agreed. Additionally, ICANN requires full disclosure of all private resolutions during the application evaluation process. Failure to disclose a side agreement or presenting a misleading arrangement could result in the rejection of an application or even broader legal consequences. To mitigate these risks, best practices include involving neutral escrow agents for financial transfers, establishing milestone-based performance clauses, and ensuring that all communications and agreements are archived and ready for submission to ICANN upon request.

For applications that do not resolve through private means, the final option is an ICANN-facilitated last resort auction. These auctions are administered by a designated auction service provider and are conducted in a sealed-bid or ascending clock format, depending on the specific procedural rules in place for the 2026 round. The proceeds of these auctions do not go to the losing applicants but are held by ICANN in a separate fund earmarked for future public benefit projects, such as enhancing internet access and supporting DNS security initiatives.

Engaging in an ICANN auction requires careful financial planning and strategic modeling. Applicants must set a maximum bid limit based on the projected value of the TLD, long-term operational costs, potential revenue, and strategic fit within their portfolio. Overbidding poses a serious financial risk, particularly for speculative applicants without a clear path to monetization or market differentiation. Conversely, underbidding can result in the loss of a strategic digital asset that could have delivered long-term brand or market benefits.

Participants in auctions should prepare by analyzing prior auction results from the 2012 round, assessing market trends, and consulting with domain name investment experts. Auction participation may also require quick access to liquid capital, as winning bids must often be paid in full within a short time frame following the conclusion of the auction. Failure to provide timely payment can result in disqualification and forfeiture, effectively eliminating the applicant from contention.

Some applicants choose to leverage auction dynamics strategically by forming consortia or bidding alliances, though such arrangements must be structured with extreme care to avoid violating antitrust regulations or ICANN’s Code of Conduct. In all cases, applicants are encouraged to maintain open channels of communication with ICANN and their competitors to facilitate a fair and compliant resolution process.

Whether pursuing a private deal or participating in a public auction, the key to success lies in preparation, transparency, and professional guidance. Each approach carries unique advantages and risks, and the best strategy will depend on the specific nature of the string, the business objectives of the applicant, and the profiles of competing applicants. For those entering the 2026 gTLD round with ambitions of securing a highly sought-after string, early engagement with experts in domain finance, law, and registry operations will be vital. As the gTLD space becomes increasingly competitive, well-executed contention resolution strategies will not only determine the fate of individual applications but may shape the broader evolution of the domain name system for years to come.

You said:

In the 2026 round of the new gTLD program, contending applications are once again expected to be a significant aspect of the domain delegation process. Contention arises when two or more applicants submit proposals for identical or confusingly similar strings, and the applications cannot all be approved. These contention sets must be resolved before any…