Letter to Members and Stakeholders From the auDA Board

Dear Members and Stakeholders,

You may have been contacted recently by a small group of auDA members with allegations that auDA and its officers have engaged in “potential cartel behaviour” in connection with encouraging new members to join.

There is no basis for these allegations and auDA categorically rejects the claim.

The central finding of the recent Government Review is that the current management and governance framework for auDA is no longer fit-for-purpose and that reform is necessary if the company is to perform effectively and meet the needs of Australia’s internet community. In particular, the current membership model, and its relationship to corporate governance, is impeding auDA’s decision making and is contributing to ongoing organisational instability.

It is critical that auDA acknowledges and responds to this finding. The work of the Consultation Model Working Group (CMWG) is a part of this process. The auDA Board is committed to ongoing reform and we encourage members to continue to engage in this reform process.

In relation to the current membership, the Department of Communications and the Arts recommended that auDA "diversify its member base in the short-term with a focus on extending membership to stakeholders that are underrepresented".  In response to this specific recommendation, auDA has been actively encouraging new members to join. In May 2018 auDA wrote to a number of industry associations, peak bodies, telecommunications providers, internet services providers, registrars and other organisations and encouraged them to consider joining, and to encourage their members and employees to also consider joining auDA.

This approach to these organisations has resulted in 955 members being admitted at the Board meeting on 18 June 2018.  All applications for membership are subject to a proper application process and the Board was satisfied on 18 June 2018 that the applicants complied with the constitutional requirements for membership.

While there is more work to be done in diversifying the membership base, this is a record number of new members and a testament to auDA's determination to show that it is progressing the change required to follow the recommendations of the Government Review.

It has been asserted that many of these new members are connected with domain name registrars and the registry operator, and thus constitutes "potential cartel behaviour".

The ACCC describes cartel behaviour as:

“Businesses that make agreements with their competitors to fix prices, rig bids, share markets or restrict outputs are breaking laws and stealing from consumers and businesses by inflating prices, reducing choices and damaging the economy.”

This is a very serious allegation to have been made and auDA strongly disagrees that by encouraging others to join the auDA membership, or by approving membership applications which satisfy its constitutional requirements, auDA or its officers have engaged in cartel behaviour or otherwise acted improperly.

Yours sincerely,

The auDA Board.

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