Among the other changes will be users being unable to sublicence a com.au domain name to another entity unless that entity is a “related body corporate” with an Australian presence, known as a third-party rule.

EAGLEGATE Lawyers Nicole Murdoch said the forthcoming licensing changes may come as an “unwelcome shock as traders lose their valuable domain names”, adding that they will also be a “game changer for parties such as business franchisors”.

The principal technology, intellectual property and cyber lawyer said: “businesses and commercial operators especially need to appreciate a domain name is not purchased”.

“It is licensed from auDA. That licence can be revoked if a trader does not use the domain name in accordance with the rules set down by auDA or it is not entitled to retain the domain name,” she said.

Ms Murdoch noted that while it is common for people to start businesses as sole traders with ABNs, “if the sole trader then restructures into a company and lets the company control the domain name, they would fall foul of the ‘third party’ rule because the company is not a ‘related body corporate’ to the sole trader under the new rules”.

“The domain name may be taken off the sole trader with only 30 days notice,” she said.

Further, under the new rules Ms Murdoch explained franchisors that allow franchisees to control a domain name “may lose the domain name because it is being used against the auDA policies where the Franchisee is not a ‘related body corporate’ to the Franchisor”.

“The issue is also that it is straightforward and cost-free for traders to make a complaint to auDA as to the entitlement of a competitor’s domain name. The rule changes make it easier to take domain names off competitors,” Ms Murdoch added.

To avoid losing a domain name, Ms Muroch advised sole traders to transfer the domain name to the new entity in the event of a restructure, rather than merely letting the new entity use the domain name. For companies, Ms Murdoch advised traders to not give control of the domain name to another entity unless that entity has an Australian presence and is “related” to the company that holds the domain name.

“There is a way forward. The new rules only apply on renewal of a domain name or registration of a domain name after 12 April 2021. Australian traders have some time to transfer the domain name to the correct entity,” she said.