Measuring Market Concentration in the Registry Business

The registry business, which underpins the domain name industry by operating top-level domains (TLDs), has undergone profound structural changes over the last two decades, particularly with respect to market concentration. While early DNS architecture featured a relatively small and regulated set of legacy TLDs with a narrow group of operators, the liberalization of the namespace and subsequent rounds of new gTLD delegation have led to significant consolidation. Understanding how to measure and evaluate market concentration within this critical layer of internet infrastructure is essential for ensuring competition, innovation, and resilience in the global domain ecosystem. Measuring market concentration in the registry business involves not only quantitative indicators but also qualitative analysis of vertical integration, pricing power, and policy influence.

At its core, the registry market consists of entities that manage the authoritative databases for specific TLDs. Each TLD has a single registry operator responsible for maintaining the zone file, coordinating with registrars, and ensuring DNS stability and performance. While hundreds of TLDs now exist—spanning legacy domains like .com and .net, country-code domains such as .de and .uk, and new gTLDs like .xyz, .app, or .online—the actual number of companies managing these registries is far smaller due to portfolio ownership and backend service consolidation. As a result, outward diversity in TLD names masks a high level of operational centralization.

One standard method used to assess market concentration is the Herfindahl-Hirschman Index (HHI), which sums the squares of the market share percentages of all firms in a given market. An HHI closer to 10,000 indicates a monopoly, while a lower HHI suggests a more competitive landscape. When applied to the registry sector by domain volume—i.e., the number of domains under management (DUM)—the HHI consistently reveals a high concentration. This is largely because the .com TLD, operated by Verisign, accounts for over 40 percent of all registered domain names globally. When .net and .name (also operated by Verisign) are included, Verisign’s market share further increases. Even though Verisign operates only a handful of TLDs, its dominance in absolute volume makes it the single most powerful actor in the registry space.

The next tier includes registry service providers such as GoDaddy Registry (formerly Neustar), Identity Digital (formed from the merger of Donuts and Afilias), and CentralNic. These entities operate or provide backend services for dozens or even hundreds of TLDs, many of which are part of the new gTLD program. Identity Digital, for example, manages over 200 new gTLDs and provides technical backend services for many more. CentralNic not only operates TLDs but also functions as a wholesaler, reseller, and service platform, blurring the lines between registry and registrar roles. Despite the numerical diversity of TLDs in their portfolios, these companies face challenges achieving the same scale and profitability as Verisign due to lower DUM and fragmented demand.

This concentration has several implications. First, pricing power is highly uneven. Verisign, operating under a fixed-price structure for .com as defined by its Registry Agreement with ICANN and subject to U.S. government oversight, can increase prices within a regulated framework. In contrast, many new gTLD registries have freedom to set and adjust prices, but their market share is small and user loyalty weak, limiting their ability to exert significant pricing influence. This dynamic reinforces the dominance of legacy TLDs, especially when end-users exhibit strong preferences for them due to brand recognition, search engine trust, and widespread use.

Second, registry consolidation can influence DNS policy development. Large registry operators often have the resources and incentives to participate in ICANN’s policy processes, lobby for favorable contract terms, and shape the direction of technical standards and compliance enforcement. The presence of vertically integrated registry-registrar entities—such as GoDaddy, which owns both retail and backend operations—also raises potential competition issues, particularly if access to premium domains, data, or services is not uniformly applied across the registrar channel.

Another dimension of concentration lies in backend registry service provision. Even if nominal ownership of TLDs appears distributed, the actual operation of the DNS infrastructure may be concentrated in a few backend providers. For example, when smaller or brand-specific registries outsource their backend services to a single provider such as Identity Digital or CentralNic, that provider gains significant control over DNS availability, technical policy implementation, and even potential content moderation decisions at the infrastructure level. If a backend provider experiences technical issues, suffers a security breach, or is subject to external pressure, the impact can cascade across hundreds of TLDs, raising concerns about systemic risk.

Regulatory and competition authorities have taken notice of these patterns. The 2020 decision by the U.S. Department of Justice to allow Verisign to increase .com prices under a revised Cooperative Agreement with the Department of Commerce attracted significant attention from antitrust analysts. Similarly, ICANN’s consideration of vertical integration and ownership concentration during the 2012 new gTLD application process reflected an awareness of these risks, though no strict ownership caps were ultimately imposed. As mergers and acquisitions continue—such as the purchase of PIR (operator of .org) nearly proceeding to a private equity firm—public scrutiny of registry ownership structures has grown sharper.

Assessing market concentration must also account for geographic and linguistic dimensions. In many developing countries, ccTLDs represent the dominant share of domain registrations and are operated under local governance models. Yet even here, outsourcing of technical functions to large global operators can replicate the same concentration dynamics. Additionally, IDN TLDs (Internationalized Domain Names) remain underrepresented in terms of both registry capacity and market penetration, limiting linguistic diversity despite policy support.

To measure and mitigate market concentration effectively, stakeholders must rely not only on statistical tools like HHI but also on transparency in ownership structures, registry agreements, and backend service contracts. ICANN’s role as a steward of the public interest demands rigorous enforcement of contractual obligations, timely publication of data, and promotion of competitive entry through future TLD application rounds. Encouraging diversity in registry models—including nonprofit, community-based, and regionally-operated TLDs—can also serve as a counterweight to commercial consolidation.

Ultimately, measuring market concentration in the registry business is not just a matter of tracking domain counts or company names. It requires a multidimensional view of technical infrastructure, economic control, policy participation, and user choice. As the DNS continues to evolve in a landscape shaped by cloud computing, cybersecurity concerns, and geopolitical tension, ensuring that no single entity or small cluster of entities exercises disproportionate influence over the naming layer of the internet will remain a critical priority for internet governance institutions worldwide.

The registry business, which underpins the domain name industry by operating top-level domains (TLDs), has undergone profound structural changes over the last two decades, particularly with respect to market concentration. While early DNS architecture featured a relatively small and regulated set of legacy TLDs with a narrow group of operators, the liberalization of the namespace…