Entri, a software vendor, accuses GoDaddy, a major domain registrar, of anti-competitive practices, interfering with business contracts and limiting market choices. The court’s recent denial of GoDaddy’s motion to dismiss the case indicates that Entri has made plausible claims, paving the way for further legal proceedings. Following the recent court ruling, Abe Storey, founder and CEO of Entri, spoke Ny Breaking, stating:
“We are pleased that the court recognizes that GoDaddy’s attempt to deprive their customers of the freedom to use their favorite software is precisely the harmful, anticompetitive actions that the Sherman Act prohibits. GoDaddy’s continued efforts to regulate the use of a web domain through conduct outside its role as registrar endangers the open Internet as we know it.”
The case of Entri, LLC v. GoDaddy.com, LLC reflects a complex legal battle in the U.S. District Court for the Eastern District of Virginia, centering on competition in the domain registration and configuration market.
Judge approves Entri’s key points for the lawsuit
GoDaddy has a dominant position in the US domain registration market, managing approximately 40% of all registered domains. Traditionally, users who lease domain names have been able to configure them manually or through third-party services using Domain Connect, GoDaddy’s integration protocol. In 2021, Entri introduced Entri Connect, a software solution that automates the configuration of DNS records and provides smoother integration for SaaS providers and their users. Entri Connect quickly gained traction, with many third-party users preferring it to GoDaddy’s Domain Connect.
Initially, GoDaddy allowed Entri Connect to operate within its ecosystem. However, tensions arose when GoDaddy introduced new policies in 2023 that banned the use of aggregator services such as Entri Connect, limiting users to Domain Connect or manual configuration. Entri claims that GoDaddy’s actions have disrupted its business by terminating existing contracts and discouraging potential deals.
Entri argues that GoDaddy’s policy violates Section 1 of the Sherman Antitrust Act by creating a negative tying arrangement. This restriction forces users to abandon competing products such as Entri Connect, reducing competition in the market. Entri also claims that GoDaddy deliberately disrupted its business contracts by notifying SaaS companies of its restrictive new policies, causing some companies to cancel or modify existing agreements.
Anthony J. Trenga, Senior US District Judge, said: “GoDaddy’s negative tie makes all aggregator services, including Entri Connect, unable to compete in the DNS record configuration market. Instead, the only option is to choose between GoDaddy’s Domain Connect protocol or requiring users to manually update their DNS records. This freedom of choice is exactly the kind of anticompetitive harm that the Sherman Act prohibits.”
GoDaddy’s market dominance allows the company to impose terms that impact smaller players like Entri, demonstrating the fine line between legitimate business practices and anticompetitive behavior. This case serves as a critical reminder that while companies can establish policies to protect their platforms, they cannot use those policies to unlawfully stifle competition.
