DNS Files Antitrust Lawsuit Against GoDaddy – Domain Name Wire

The company claims that GoDaddy is unfairly preventing it from automating customer DNS change requests.

A company that helps domain owners update their DNS records has filed an antitrust lawsuit against GoDaddy (NYSE: GDDY).

Entri acts as a communication channel between SaaS companies and domain registrars. If a customer needs to update their domain’s DNS records to work with an email provider, website builder, or other SaaS company, they can use the wizard directly on the SaaS company’s website to make those changes.

This will save you the hassle of logging in to your domain registrar and manually making changes to your DNS settings, such as adding TXT and CNAME records.

DNS changes are an issue that has plagued both domain registrars and SaaS companies for years, with both dealing with support requests from confused customers.

In response to this problem, GoDaddy created Domain Connect in 2016 as an open standard published under the MIT License.

Entri was created as an alternative solution to make it easier for SaaS companies to integrate with domain registrars to make DNS changes.

The company cites Domain Connect’s shortcomings as reasons why companies would pay for Entri’s service. In addition to the limited technical implementation work, Entri says Domain Connect only works with four domain registrars. Entri’s solution works with 40, meaning more SaaS customers can set up their domains through the solution than through Domain Connect.

According to the lawsuit, Entri (pdf) initially offered its customers the ability to make changes to their GoDaddy domains through Entri’s custom solution. The lawsuit says that at GoDaddy’s request, the company began using the Domain Connect protocol for GoDaddy connections starting in April 2022 and signed an agreement:

“Pursuant to this Agreement, when a new SaaS company wanted to use Entri Connect, Entri would send GoDaddy a “template” that complied with the Domain Connect protocol, which specified the required DNS settings for that SaaS company’s application. GoDaddy would then enable that template, which would allow Entri Connect to function as intended with domains registered through GoDaddy.”

There were numerous requests for these templates. The lawsuit states that until July 2023, the companies had a shared Slack channel where Entri would submit template requests.

But then Entri received disturbing news.

In August 2023, a GoDaddy employee informed Entri via Slack, “(a)ll Domain Connect (sic) requests are currently on hold. Resources are at a premium and the DNS team is extremely busy. You can post your requests here, but we will not be responding to them at this time.”

Entri claims that GoDaddy required it to pay a license fee to use Domain Connect. Although Entri believed it had an agreement in principle, the parties were never able to finalize the agreement.

The lawsuit alleges that in December 2023, GoDaddy implemented a new policy that prohibited customers from using Entri to change their DNS. It also informed some Entri SaaS customers that they could no longer use Entri to change their customers’ DNS records.

The lawsuit quotes one anonymous Entri customer as saying in a conversation with GoDaddy:

Transparently, (GoDaddy) had some kind of scare tactics meeting where they got () aggressive with us… The tone of the meeting was so negative that it left us hurt… it was just so impersonal (sic) and so mean, to the point where we said we didn’t do anything, um, anyway, we just wanted to get back to you all. I don’t know if you’re hearing this from others. I imagine you’re, based on the tone of their conversation, it clearly sounds like they’re trying to monetize something that they didn’t monetize before and they’re trying to recoup as much () revenue as they can, but () we’ve enjoyed working with all of you and we really like your product, so, like, we hope to continue using it, but also, in the middle of our daily lives, being pulled aside and being told off, it’s a little surprising.

Entri customers began complaining to the company, citing the fact that a large percentage of their customers used GoDaddy. Entri’s service could no longer function for these customers, significantly reducing its value.

According to Entri, this is where antitrust laws come into play:

Entri’s customer experience shows that GoDaddy has a unique ability to force SaaS companies and their end users to behave in ways that are inconsistent with how they would normally behave in a free market. Entri’s customers and prospects have made this clear to Entri.

Entri further wrote:

Entri does not suggest — and has never suggested — that GoDaddy is obligated to work with Entri. From 2021 through April 2022, Entri supported users with DNS records for domains registered with GoDaddy using its own DNS record setup systems and processes. From April 2022 through January 2024, it used Domain Connect, as GoDaddy preferred. Either option is acceptable. However, GoDaddy cannot legally threaten Entri customers or attempt to restrict Entri from helping end users configure their specific DNS setup preferences.

Interestingly, according to the lawsuit, GoDaddy is now demanding a fee from companies that use Domain Connect to make changes to domains registered with GoDaddy.

I have reached out to GoDaddy for comment. I will update this article once I hear back.