A new lawsuit filed against GoDaddy by Entri alleges that GoDaddy is unfairly preventing it from automating DNS change requests for customers. The lawsuit filed in the United States District Court for the Eastern District of Virginia brings serious allegations of anti-competitive behavior and market manipulation.
Entri, founded in 2021, provides a service called Entri Connect, which acts as a conduit between Software as a Service (SaaS) companies and domain registrars. This service helps domain owners update their DNS records without navigating the often confusing interfaces of domain registrars like GoDaddy. This can involve tasks such as adding TXT and CNAME records—critical for integrating third-party applications like email services or website builders.
On the other hand, GoDaddy is the world’s largest domain registrar, with over 85 million domains under management. Despite being an industry behemoth, GoDaddy is now under fire for allegedly using its market power to stifle competition.
Entri’s lawsuit paints a picture of a company facing unfair barriers in trying to offer a superior service. Initially, Entri used its proprietary solution to handle DNS updates for domains registered with GoDaddy. However, at GoDaddy’s request, Entri began using GoDaddy’s Domain Connect protocol in April 2022. Domain Connect, an open standard developed by GoDaddy in 2016, aims to simplify DNS configurations but has limitations—most notably its support for only four domain registrars.
According to the lawsuit, Entri had a functional working relationship with GoDaddy, even establishing a shared Slack channel to streamline communications for DNS template requests. However, in August 2023, GoDaddy suddenly put all such requests on hold, citing resource constraints. Entri alleges that this was merely a pretext, as GoDaddy later asked Entri to pay a licensing fee to use Domain Connect—a demand that was never finalized into a contract.
Then, in December 2023, GoDaddy reportedly instituted a new policy preventing customers from using Entri to make DNS changes. This policy was communicated directly to some of Entri’s SaaS customers, leading to significant disruptions.
In or around December 2023, GoDaddy formulated and announced a new policy: customers who purchased their domains through GoDaddy would not be permitted to use Entri Connect to update and configure their DNS records. GoDaddy communicated this new policy to SaaS companies that had previously integrated the Entri Connect modal into their applications. GoDaddy wrote: “We are not working with any aggregator services, like Entri, and the only way to have GoDaddy Domain Connect is via direct integration.”
One unnamed Entri customer described their experience with GoDaddy as a “scare tactic meeting” where they felt unfairly pressured. The customer stated, “The tone of the meeting was so negative that it left us scarred… it clearly sounds like they’re trying to monetize something that they haven’t monetized before.”
This alleged aggressive stance has left many SaaS companies in a bind. Given that a significant portion of their customers use GoDaddy, Entri’s service has been substantially devalued, leading to a cascade of complaints and concerns from its clients.
Antitrust laws are designed to promote fair competition for the benefit of consumers. Entri claims that GoDaddy’s actions are a clear violation of these laws. The lawsuit states, “GoDaddy has the unique ability to force SaaS companies and their end users to behave in ways that are inconsistent with how they would ordinarily act in a free market.”
Entri contends that while they are not suggesting GoDaddy is obligated to work with them, GoDaddy cannot lawfully restrict its customers from using Entri’s services. “What GoDaddy cannot lawfully do is threaten Entri’s customers or attempt to restrict Entri from assisting end users in setting up their stated DNS configuration preferences,” Entri argues.
After communicating to SaaS companies that GoDaddy domains would no longer work with Entri, GoDaddy attempted to convert many of them to paying customers of GoDaddy’s own Domain Connect services. This was met with extremely limited success. SaaS companies have overwhelmingly declined to pay GoDaddy for these services. SaaS companies GoDaddy has attempted to convert have largely declined, opting instead to remain with Entri even with the substantial uncertainty surrounding Entri Connect and GoDaddy domains.
Interestingly, the lawsuit also reveals that GoDaddy is now charging companies that use Domain Connect to make DNS changes on GoDaddy-registered domains. This move doesn’t make much sense, especially since Domain Connect was touted as an open standard meant to simplify users’ processes.
GoDaddy being edgy is nothing new
Based on the details in the lawsuit, GoDaddy’s actions could be perceived as anti-competitive and potentially harmful to market fairness and consumer choice. By blocking Entri from automating DNS changes and charging for a previously free, open-source protocol, GoDaddy appears to leverage its market dominance to stifle competition and monetize services initially intended to be freely accessible.
Such behavior aligns with practices often criticized in antitrust discussions, where a dominant player uses its market power to disadvantage competitors and control market dynamics. This can harm smaller companies and limit consumer choices, which are key concerns in maintaining a competitive market environment.
Then again, GoDaddy is no stranger to controversy. The company has faced backlash for various reasons, from controversial advertising campaigns to accusations of unethical business practices. There is an entire Wikipedia page about what they have pulled over the last decade and more. These past incidents have contributed to a reputation many perceive as prioritizing profit over fair competition and customer interests.
Stack Diary has reached out to GoDaddy to ask for a comment.
