The Market for Private Dispute Resolution Services: An Empirical Re-Assessment of ICANN/IDRP Performance

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We present a thorough analysis of one of the ADR regimes that is considered a significant success in Internet markets, the Uniform Dispute Resolution Policy (UDRP) implemented by the Internet Corporation for Assigned Names and Numbers (ICANN). In this work, we perform a complete empirical analysis of the UDRP and evaluate its performance. We then extrapolate the results to other sectors of the Internet market and to private dispute resolution in general.[...] In this paper, we thoroughly critique the performance of the UDRP providers and identify the main variables that determine ICANN's efficiency. For example, one of the key variables, and also a main concern of ICANN, is the duration of the procedure to decide these cases. We analyze the decisions of the complainants in deciding to send their claim to a particular dispute resolution provider. Using a multinomial logit regression model to determine if complainants select the provider based on bias or the duration of the procedure, we show that duration is at least as important as bias in selecting providers. This is a key finding because our results show that the emphasis of other theoretical and empirical work that has exclusively concentrated on the effects of bias is misplaced. Consequently, we recommend that more attention should be paid to other performance and efficiency indicators, particularly the indicators proposed in this paper. In our empirical analysis, we used the duration of the cases as the variable to measure the general efficiency of each provider. Additionally, we applied regression models based on the analysis of the system's duration to identify different factors that determine the system's performance. In studying the actual performance of providers, we have found that the UDRP providers have different duration functions. Moreover, because there are different procedures, different review processes, and different technologies used to handle these cases, forum shopping is very likely to exist. This existence of forum shopping based on the performance of the providers is different from forum shopping based on the bias of the provider towards the complainant. These results are supported by: (1) the fact that the two most important domain name dispute resolution providers are located at the extremes of the possible technological structures of the UDRP; and (2) the fact that the providers have an unambiguous bias for specific countries. This finding is important because most of the literature discussing provider bias focuses on bias between particular individuals. In addition, the geographical bias towards the countries of origin of the providers is important when analyzing the design of a general dispute system such as the UDRP. Additionally, the evidence of such bias strongly contradicts ICANN's claim that the system is intended to handle the most diverse claims involving the Internet, regardless of the parties' origins. We also found that some panelists have a completely different duration function in deciding cases than the rest of the cases viewed collectively under any private provider. That said, structural differences among providers can influence the panelists' performance. Interestingly, the fact that some panelists exhibit a different behavior from the rest of the panelists within the same provider could be beneficial and providers should give these panelists more cases to handle. At the same time, panelists consistently favoring one party over another should be evaluated carefully and should perhaps not handle as many cases. This evidence calls into question the overall manner in which providers assign cases to the panelists. In addition, we find that the evidence presented by complainants and respondents affects the performance of the providers. Finally, we evaluate the differences in performance between one and three member panels. We find that three member panels are as efficient as single member panels. Accordingly, changing to a general three member panel system could promote fairness without creating a negative impact on efficiency. The paper is organized as follows. First, we describe the ICANNUDRP system and the providers in charge of the dispute resolution process. Second, we present a regression model to analyze the selection process employed by the complainants in choosing a dispute resolution provider. We also describe the regression technique used for the empirical analysis and the characteristics of the database. Third, we present a general empirical analysis of the UDRP system providers. Fourth, we analyze the regression model and present the results from the model. Fifth, we analyze the results in terms of the policy recommendations derived from these results. Finally, we present our conclusions.
Original languageEnglish (US)
Pages (from-to)285-380
Number of pages96
JournalMichigan Telecommunications and Technology Law Review
Issue number2
StatePublished - 2005

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