auDA Is Removing the “Close and Substantial Connection” Test: What .com.au and .net.au Owners Need to Know

If you hold a .com.au or .net.au domain name that describes what you sell or what you do, this one is worth your time. The .au Policy Advisory Panel (Panel) has handed down its report and the auDA Board has adopted all ten of its recommendations. The one that will be felt most widely is Recommendation 2, which deletes subparagraph (f) from clause 2.4.4(2) of the .au Licensing Rules. That is the eligibility pathway most people know as the “close and substantial connection” test. If it proceeds, Australian businesses, schools, charities and community groups will need to prove their entitlement to a .com.au or .net.au domain name in a different way, and many of them will pay more to register and renew.

The short version

• What is changing: subparagraph (f) of clause 2.4.4(2) of the .au Licensing Rules will be deleted.
• What subparagraph (f) does today: it lets you qualify for a .com.au or .net.au domain name that matches, or is a synonym of, a service you provide, goods you sell, an event you run or sponsor, an activity you teach or facilitate, or premises you operate.
• Who decided: the Panel recommended the deletion and a minority of the Panel opposed it. The auDA Board adopted all ten recommendations.
• Who is affected: businesses, sole traders, schools, charities, sporting clubs and other organisations holding descriptive or generic .au domain names.
• What it is likely to mean: affected registrants will need a business name, company name or Australian trade mark that matches the domain name to stay eligible, plus the application, renewal and compliance costs that come with it.
• Where it is up to: nothing has changed yet. auDA will prepare an Implementation Plan and publish draft Licensing Rules for public consultation.

What auDA has actually decided

The Panel’s report contains ten recommendations. Recommendation 2 is the one to read:

RECOMMENDATION 2: The Panel recommends deleting subparagraph (f) from section 2.4.4 (2) of the .au Licensing Rules. Noting that a minority of the Panel opposed that position and instead supported the option to maintain the status quo.

What is clause 2.4.4(2)(f) of the .au Licensing Rules?

Clause 2.4.4 of the auDA Licensing Rules sets out the allocation rules for .com.au and .net.au domain names. It says the following:

2.4.4    A Person applying for a Licence in the com.au and net.au Namespaces must be

1. a Commercial Entity; and
2. the domain name applied for must be:
   1. a Match of the Person’s company, business, statutory or Personal name; or
   1. an Acronym of the Person’s company, business, statutory or Personal name; or
   1. a Match of the Person’s Australian Trade Mark; or
   1. a Match to or an Acronym of a name of a Related Australian Body Corporate or
   1. a Match or an Acronym of a name of:
      1. a partnership of which the Person is a partner;
      1. a trust of which the Person is a trustee; or   
   1. a Match or Synonym of the name of:
      1. a Service that the Person provides;
      1. Goods that the Person sells (whether retail or wholesale);
      1. an event that the Person registers or sponsors;
      1. an activity that the Person facilitates, teaches or trains;
      1. premises which the Person operates

and which that Person is providing at the time of the application.

In plain terms, clause 2.4.4 gives a registrant with an Australian connection several ways to qualify for a .com.au or .net.au domain name. Subparagraph (f) is the broadest of them, and it is the one people are really talking about when they mention the “close and substantial connection” test. The question it asks is simple: does this registrant have a genuine connection to this domain name? A pathway of this kind has been part of .au policy since auDA’s earliest days, roughly 25 years ago. It is the reason an Australian business or community group can register a descriptive domain name without first securing a matching name registration or trade mark.

Who actually relies on subparagraph (f)?

Deleting subparagraph (f) removes the pathway that covers a service you provide or goods you sell. These examples show the kinds of registrants who use it every day (the names are illustrative only):

1. Jane’s Bakery sells apple pies and custard tarts, so she registers applepies.com.au and custardtarts.com.au under subparagraph (f).
2. John’s Mortgage Broking provides mortgage broking services in Sydney and Bondi, so he registers mortgagebrokersydney.com.au and bondimortgagebroker.com.au under subparagraph (f).
3. Fabulous Clothing sells hoodies and socks, so it registers hoodies.com.au and socks.com.au under subparagraph (f).
4. Melbourne Primary School runs an annual fete to raise funds for its students, so it registers MPSFete2026.com.au under subparagraph (f).
5. East Subiaco Football Club plays at a home ground called the EJ Winderberg Oval, so it registers EJWinderberg.com.au under subparagraph (f).

What the change could mean for your domain names

If the change goes ahead as adopted, each of those registrants would need to fall back on a different limb of clause 2.4.4. In most cases that means a company name, a registered business name, or an Australian trade mark that matches the domain name.

A few practical consequences follow.

• You will pay for eligibility. Business name registrations must be renewed every year and trade mark registrations every ten years. Registrants who qualify under subparagraph (f) today at no extra cost would be picking up those fees indefinitely.
• Not everything can be trade marked. Plenty of descriptive or generic words, “hoodies” or “socks” for example, are unlikely to be registrable as trade marks because they simply describe what is on offer. For those registrants there may be no easy alternative pathway at all.
• A missed renewal could cost you the domain name. If a business name lapses, the registrant may stop being eligible and risk losing the domain name. Subparagraph (f) currently acts as a safety net in exactly that situation.
• Less room to move as your business changes. Structures, branding and trading names shift over time. Subparagraph (f) recognises a continuing genuine connection to a domain name even when the other limbs no longer line up neatly.
• More red tape for everyone. Removing the pathway is likely to mean more manual eligibility assessment by registrars and auDA, and more eligibility disputes to go with it.

Why the Panel recommended the change

The Panel’s stated concern is domain name monetisation: registrants earning advertising revenue from generic domain names registered under subparagraph (f), and the use of that pathway to support speculative registration. The report does not quantify the harm said to flow from subparagraph (f), and monetising descriptive domain names is a long standing and widespread practice internationally.

Why a minority of the Panel voted against it

A minority of the Panel, including the author, opposed deleting subparagraph (f). Their main points were these.

1. No evidence of harm was identified. The majority did not point to cogent evidence of harm caused by subparagraph (f), which has operated in substance since the early days of the .com.au namespace. Without demonstrated harm, there is no clear reason to disturb settled policy.
2. It is not just a speculator’s tool. Subparagraph (f) is a legitimate pathway for businesses, charities, schools and community organisations that have a genuine connection to a domain name but do not neatly satisfy the other criteria. In the minority’s view, deleting it will cause real disruption and cost, potentially affecting up to one million registrants. One submission to the Panel estimated an increased annual cost to Australians of around $30 million. The Panel did not conduct its own costings.
3. Existing registrants are left in limbo. The recommendation does not say how registrants who rely on subparagraph (f) today will keep their licences, or whether transitional or grandfathering arrangements will apply.
4. Real business scenarios are not fully accounted for. Businesses evolve, and subparagraph (f) preserves eligibility where a registrant keeps a legitimate connection to a domain name despite changes to structure, branding or trading name. Removing it may create compliance problems for legitimate businesses without necessarily stopping abuse. A lapsed business name, for instance, could put both a domain name and the business that depends on it at risk.
5. It is out of step with comparable countries. The recommendation does not sit comfortably with domain name practice in New Zealand, the United Kingdom, Singapore and other OECD countries.

How much could this cost Australian registrants?

Industry estimates put the number of .au domain names potentially affected at up to 1,000,000. At a business name registration fee of $47 per year, the additional cost to Australian registrants could exceed $47 million a year. A separate submission to the Panel estimated an increased annual cost of around $30 million. The Panel did not publish a costing of its own.

What happens next, and when

Nothing changes today. auDA has said:

auDA will prepare an Implementation Plan that takes into account the impact of any Recommendations on registrants. It will then draft proposed changes to the .au Licensing Rules aligned to the Panel’s recommendations.

When prepared, the draft .au Licensing Rules and explanatory guide will be published on the auDA website for public consultation, giving stakeholders and the broader community an opportunity to have their say about the proposed implementation of the Panel’s recommendations.

auDA will also provide regular updates on key dates and any transition arrangements in the coming months.

The report and the Board’s adoption of it settle the policy direction, but the detail, including any transitional arrangements, will be worked out in the Implementation Plan and the public consultation on the draft Licensing Rules. That consultation is where registrants and their advisers get to be heard.

What registrants should do now

There is no need to panic, but there is plenty you can do to get ahead of it.

• Audit your .au portfolio. Work out which of your domain names currently rely on subparagraph (f). They are usually the descriptive or generic ones that do not match your company name, business name or trade mark.
• Check your other eligibility pathways. See whether an existing company name, registered business name, related body corporate name or Australian trade mark would already support each domain name. We can assist with trade mark applications, just get in touch.
• Look at trade mark protection where it is available. A registered Australian trade mark that matches the domain name gives you an eligibility pathway under clause 2.4.4(2)(c), and it has brand value in its own right. Purely descriptive terms may not be registrable unless they form part of a logo.
• Diarise your renewals. If your eligibility ends up resting on a business name, a renewal you miss could put the domain name itself at risk.
• Make a submission. auDA will publish draft Licensing Rules for public consultation, and that is the moment to influence transitional and grandfathering arrangements.
• Renew your domain names for the maximum five year period. If grandfathering provisions follow the pattern of previous changes, a long renewal now may buy you time to work through the changes and prepare.

Frequently asked questions

Has the close and substantial connection test already been removed?

No. The auDA Board has adopted the Panel’s recommendation, but the .au Licensing Rules have not been amended yet. auDA will prepare an Implementation Plan and publish draft rules for public consultation before anything takes effect.

Will I lose my .com.au domain name?

Not automatically. If the change is implemented, you will need to satisfy one of the remaining limbs of clause 2.4.4(2), such as a matching company name, registered business name or Australian trade mark. auDA has not yet said whether transitional or grandfathering arrangements will apply to existing registrants.

What is subparagraph (f) of clause 2.4.4(2)?

Subparagraph (f) allows a .com.au or .net.au domain name to match, or be a synonym of, a service the registrant provides, goods the registrant sells, an event the registrant runs or sponsors, an activity the registrant facilitates or teaches, or premises the registrant operates.

How much could the change cost?

Industry estimates suggest up to 1,000,000 domain names could be affected. At $47 a year for a business name registration, the aggregate cost could exceed $47 million a year. One submission to the Panel estimated approximately $30 million a year. auDA and the Panel have not published costings of their own.

Can I register a trade mark for a generic domain name?

Often not. Words that merely describe the goods or services on offer are generally not registrable as trade marks in Australia, so registrants holding descriptive domain names may have limited alternatives.

When can I have my say on the .au Licensing Rules?

auDA has said the draft .au Licensing Rules and an explanatory guide will be published for public consultation, and that it will provide regular updates on key dates and any transition arrangements in the coming months. If you hold descriptive .com.au or .net.au domain names and want help assessing your eligibility or your trade mark options, the team at Mills IP can walk you through it.