String Contention: When Multiple Parties Want the Same TLD

## What Is String Contention? String contention occurs when two or more valid applications are received for the same TLD (Top-Level Domain) string in the same application round. Because only one entity can operate a given TLD (Top-Level Domain) extension, ICANN must determine which applicant proceeds. In the 2012 round, 751 contention sets were created from the 1,930 applications received. Some strings attracted only two competing applicants; others attracted more than ten. The string .app had 13 applicants; .home had 11. Resolving these conflicts — and the financial stakes involved — was one of the most contentious aspects of the entire round. The 2026 round uses a revised, multi-step contention resolution process designed to be fairer and more predictable than the 2012 approach. Understanding this process is essential for any applicant targeting a potentially competitive string. Use the TLD Comparison Tool to research which TLDs from the 2012 round faced contention and how they were resolved. ## Step 1: ICANN Identifies the Contention Set When the application window closes, ICANN identifies all string contention sets — groups of applications that applied for identical or confusingly similar strings. "Confusingly similar" is assessed algorithmically and by expert panel: - Identical strings (e.g., three applications all for ".music") - Strings that differ only in character substitutions that are visually confusable (e.g., .rnusic vs .music in some script contexts) - IDN variants of the same semantic string (e.g., .музыка and .music may be considered related) Applicants in a contention set are notified after the administrative review phase. Knowing your contention set early allows you to begin resolution negotiations promptly. ## Step 2: Private Resolution (Negotiation Among Applicants) ICANN's first preference is for applicants within a contention set to resolve the matter privately, without ICANN's involvement. Options for private resolution include: ### Applicant Withdrawal with Compensation One or more applicants agree to withdraw their application in exchange for financial compensation from the remaining applicant(s). ICANN facilitates this by providing formal withdrawal procedures and partial fee refund calculations. This is the most common outcome in small contention sets (2–3 applicants). In 2012, many applicants negotiated payments ranging from $250,000 to several million dollars to withdraw. ### Applicant Merger or Joint Venture Two or more applicants agree to combine their applications and operate the TLD jointly under a shared entity. ICANN allows this but requires that the merged application meet all eligibility requirements of the new combined entity. ### Private Auction Applicants can conduct a private auction among themselves, with the highest bidder assuming the application rights and compensating the losers. Proceeds from private auctions go to the losing applicants — not to ICANN — making this more attractive to all parties than a last-resort auction. **ICANN's private resolution window**: Typically 30–60 days after notification of contention set membership. Extensions may be granted for complex negotiations. ## Step 3: Community Priority Evaluation If private resolution fails and at least one applicant in the contention set is designated as a **community applicant**, ICANN conducts a Community Priority Evaluation (CPE). A community applicant can receive priority — bypassing the contention process — if it scores highly enough on a defined CPE scoring rubric: | CPE Criterion | Points Available | |--------------|-----------------| | Community establishment (long-standing existence) | 4 | | Community delineation (clear, objective criteria) | 4 | | Community nexus (string closely corresponds to community) | 4 | | Community support (endorsements, no significant opposition) | 4 | | **Total** | **16** | A score of 14 or above on the CPE grants community priority. The applicant proceeds; competitors in the contention set do not. This provision was designed to protect community TLDs from being outbid by commercial interests. In practice, achieving a CPE score of 14/16 is difficult — the community must be genuinely established, clearly defined, and able to demonstrate broad support. The sTLD (Sponsored Top-Level Domain) (sponsored TLD) concept from the pre-2012 era — which had similar community gatekeeping — informs the CPE framework. ## Step 4: Last-Resort Auction If private resolution fails and no applicant qualifies for community priority (or community priority evaluation does not resolve the set), ICANN conducts a **last-resort auction**. ### How the Auction Works 1. ICANN designates an independent auction provider (in 2012, this was Power Auctions LLC). 2. All remaining applicants in the contention set are eligible to bid. 3. The auction is conducted as a sealed-bid or ascending-bid format, depending on ICANN's published procedures. 4. The highest bidder wins and proceeds with their application. 5. Losing applicants receive a partial refund of their evaluation fee. They do not receive any share of the auction proceeds. ### Where Auction Proceeds Go This was the most contentious issue in the 2012 round. In 2012, auction proceeds went to ICANN, which held them in trust while the community debated allocation. In 2023, ICANN adopted the AGB (Auction Proceeds Governance) policy: future auction proceeds from the 2026 round will be directed to a designated fund supporting public interest internet development projects. **Key implication**: Unlike in 2012, winning the auction in 2026 means you pay a premium that benefits the global internet community rather than simply enriching ICANN's reserves. ### Notable 2012 Auction Results | String | Winner | Auction Price | |--------|--------|-------------| | .app | Google | ~$25 million | | .dev | Google | ~$25 million | | .blog | Automattic | ~$19 million | | .store | Radix | ~$8 million | | .llc | GoDaddy | ~$8.8 million | | .inc | Intercap Holdings | ~$8.2 million | These figures illustrate the financial stakes for highly desirable generic strings. ## Strategy: Should You Enter a Contention Set? Entering a contention set without sufficient capital is strategically unwise. Before applying for a potentially contested string, you must: 1. **Research likely co-applicants**: While you cannot know for certain who will apply, industry conference discussions, publicly expressed interest, and the commercial value of the string are good predictors. 2. **Budget for the worst case**: If you cannot afford to win a last-resort auction for your string at the expected clearing price, either: - Target a less competitive string - Plan to negotiate a buyout of competitors - Apply only if you believe a CPE victory is achievable 3. **Evaluate community priority eligibility**: If your application qualifies as a genuine community TLD with a score of 14/16 on the CPE, you may be able to bypass the auction entirely — a significant advantage. 4. **Prepare for private resolution early**: The moment the application window closes and contention sets are announced, initiate contact with co-applicants. Early negotiations often achieve better outcomes than waiting until the last-resort auction deadline. ## Contention Between Brand and Generic Applicants A specific scenario worth addressing: what happens when a brand TLD applicant and a generic string applicant apply for the same string? Example: A company with "Homes" in its name applies for .homes as a Brand TLD (.brand), while a commercial real estate registry consortium also applies for .homes as a generic string. Both applications are valid. In this case: - The brand applicant may not qualify for community priority (brand TLDs are not typically community designations). - The generic applicant may not qualify for community priority either (without an established community). - Private resolution is most likely — one party pays the other to withdraw. - If private resolution fails, a last-resort auction determines the winner. Brand applicants with sufficient resources have consistently won such contests. See Should Your Company Apply for a Brand TLD? for analysis of whether a brand TLD investment makes sense for your organisation. ## Contention Sets and the Registry Agreement Even after winning a contention set — by any resolution mechanism — the winning applicant still must complete all remaining evaluation steps before receiving a Registry Agreement from ICANN. Winning the contention process is necessary but not sufficient; evaluation must also be passed. For a complete walkthrough of what happens after contention resolution, see How to Apply for a New gTLD in 2026. ## Auction Proceeds Policy: A 2026 Improvement One of the most contentious legacies of the 2012 round was the fate of auction proceeds. ICANN collected over $200 million from last-resort auctions, and the community argued for nearly a decade about how those funds should be distributed. In 2023, ICANN adopted the Auction Proceeds Governance (APG) framework, establishing that: - Proceeds from 2026 last-resort auctions will go into a dedicated fund. - The fund will support projects that benefit the global internet community, with a focus on developing economies, digital inclusion, and internet governance capacity building. - A multi-stakeholder committee will govern fund allocation, with transparent application and grant processes. This change eliminates the perverse incentive that criticised the 2012 auction system — where ICANN had a financial interest in maximising auction proceeds rather than encouraging private resolution. In 2026, ICANN has no stake in whether contention sets are resolved privately or by last-resort auction. ## Practical Negotiation Dynamics in Contention Sets Contention negotiations are business negotiations, and the same principles apply: knowing your walk-away price, understanding the other party's incentives, and being willing to reach a deal that leaves both sides better off than a last-resort auction outcome. Key negotiation insights from 2012: - **Move first**: Applicants who initiated contact early — before ICANN's formal private resolution period — often achieved better terms. - **Understand the other party's motivation**: A Brand TLD (.brand) applicant protecting their trademark has very different incentives from a commercial registry operator seeking registration volume. Tailored offers resonate more. - **Use intermediaries**: Domain industry consultants and legal counsel experienced in contention negotiations can facilitate deals that direct negotiation might not produce. - **Price the auction as the alternative**: The rational ceiling for a buyout payment is slightly below the expected auction clearing price, discounted for certainty. Understanding the other party's auction budget is valuable intelligence.