Are new gTLDs monopolies?

The question of whether new gTLDs (generic Top-Level Domains) are monopolies is complex.

In the domain name system, a TLD registry (the entity that operates a TLD like .app or .shop) is often described as having a monopoly over its own extension, but this is offset by intense competition between TLDs in the broader domain market.

Here is a breakdown of the two competing perspectives:

1. The Monopoly View (Monopoly within the TLD)

In a strict sense, the registry operator for a specific TLD has a functional monopoly over that domain extension because they are the sole supplier of all domain names ending with that string.

• Sole Supplier: If a company wants the domain name example.finance, they have no choice but to register it through the single, designated registry operator for the .finance TLD (and its authorized registrars).
• Renewal Power: This monopoly power is most significant post-sale, specifically regarding renewals. Once a user has built a website, email, and brand identity around a domain (e.g., mybrand.app), the cost of switching to a different TLD (the "switching cost") is very high. This gives the registry operator considerable power to raise renewal prices for existing customers, a practice that has raised competition concerns, especially with legacy TLDs like .com.

2. The Competition View (Competition between TLDs)

The entire purpose of ICANN's New gTLD Program was to promote competition and consumer choice in the domain name market, which was previously dominated by a handful of legacy extensions like .com and .net.

• Substitutability: While a registry monopolizes its own TLD, it competes fiercely with hundreds of other TLDs. If the price for a .shop domain becomes too high, a potential registrant can choose a domain on .store, .boutique, or another relevant extension.
• Market Fragmentation: The introduction of over a thousand new gTLDs has greatly fragmented the market, increasing choice for consumers and businesses. This prevents any single new gTLD from gaining the kind of dominance that the legacy TLDs have.
• ICANN Oversight: ICANN, the internet's governing body, has mechanisms in place to mitigate anti-competitive behavior by registry operators:
  • Registry Services Evaluation Process (RSEP): ICANN reviews any proposed new service by a registry to determine if it "could raise significant competition issues" before approval.
  • Equivalent Access: Registry agreements obligate operators to provide equivalent and non-discriminatory access to all registrars.

A Key Distinction in the 2026 Round

A controversial element in previous rounds was the potential for "Closed Generic TLDs"—where a single company operates a generic term (like .book or .cloud) for its own exclusive use, preventing the public from registering domains within it.

For the upcoming 2026 New gTLD round, ICANN has prohibited applications for Closed Generic TLDs, aiming to eliminate one of the most significant potential avenues for creating a private monopoly over a common word on the internet.

In summary, while every TLD registry is a monopoly for its specific string, the New gTLD Program increases overall competition in the domain name marketplace by offering thousands of substitution options, thus limiting the practical monopolistic power of any single new extension.