(…) domain names are not merely technical tools but strategic assets with significant economic implications.
Juan Esteban Pacheco
Recently, Colombia won a multi-million-dollar lawsuit over its country code top-level domain (ccTLD) after an ICSID tribunal dismissed the investor’s claim, emphasizing not only investor protection standards under international treaties but also the growing global relevance of domain name management.
The arbitration and the dispute relate to Colombia’s decision not to extend a Concession Agreement between the Ministry of Information, Technology, and Telecommunications (MinICT) and a company owned and controlled by the investor at the relevant time.
What are ccTLDs, and why do they matter?
A ccTLD is a type of top-level domain (TLD) in the Domain Name System (DNS) that identifies a country, territory, or geographic location. It consists of two letters based on the ISO 3166-1 alpha-2 code for the respective country or region. Each ccTLD is managed by a designated organization within its respective country and often has specific registration rules.
Interestingly, some ccTLDs, like “.co” (Colombia) or “.io” (British Indian Ocean Territory), are also widely used globally for their branding and marketing potential. This phenomenon occurs when a ccTLD resembles a meaningful word, abbreviation, or concept that aligns with a company’s brand identity. For instance:
- “.co” is popular as a shorthand for “company” or “corporation.”
- “.io” appeals to tech companies and startups because “I/O” is associated with input/output in computing.
This global demand makes ccTLDs valuable assets, with “.co” becoming a sought-after domain for businesses worldwide.
Colombia’s regulation of the “.co” domain
In 2006, the Colombian government enacted Law 1065, which regulates the administration of domain name registration for the “.co” domain. The law treats “.co” as a public resource, and the MinICT oversees its administration.
The dispute arose from Colombia’s decision not to renew the Concession Agreement and instead launch a new tender process for managing the “.co” domain. The tribunal ruled on alleged violations of (i) fair and equitable treatment, (ii) national treatment, (iii) confidential business information, and (iv) unreasonable measures.
Regarding the alleged violation of fair and equitable treatment, the tribunal concluded that MinICT’s decision to launch a new tender process instead of renewing the Concession Agreement was not arbitrary or unjust.
This decision was based, in part, on an expert report highlighting market opportunities and the evolving value of the “.co” domain. The tribunal validated this approach, citing commercial risks and the reduced cost of registry services after ICANN’s expansion of domain options.
MinICT’s decision was in line with a legitimate policy objective. It was driven by Colombia’s assessment of legal risks, with the reduced registry service costs following ICANN’s 2012 expansion of TLDs making the market more competitive.
As ccTLDs like “.co” gain prominence, their management is crucial in fostering a competitive digital landscape, strengthening national economies, and supporting global business growth. In part, the decision highlights the growing value of TLDs in the global digital economy and their potential as valuable assets for both nations and businesses. The outcome underscores that domain names are not merely technical tools but strategic assets with significant economic implications for both states and investors.
Juan Esteban Pacheco is a lawyer from Universidad del Rosario (Bogotá, Colombia), with specializations in commercial law and international law, and a postgraduate degree in Business Law from the Universidad Externado de Colombia. He is currently pursuing an LL.M. in International Commercial Arbitration at Stockholm University. His professional practice focuses on dispute resolution related to contractual relationships, shareholder disputes, industrial property, competition law, domain name disputes, copyright and entertainment law, as well as alternative dispute resolution mechanisms. He has also served as a member and coach of the International Commercial Arbitration team at Universidad del Rosario.
