Scenario
John Smith launches a social media startup called Turquoise Cow. He buys the Internet domain name "turquoise-cow.com" from GoDaddy. The price is $20 per year.
Years later, Turquoise Cow has become a leading social media platform, overtaking Facebook, Instagram, TikTok, etc. GoDaddy decides to exploit this opportunity, raising the yearly price to $2,000,000. John and his company feel like this new, exorbitant price is unfair. However, losing the domain name would severely harm the company, so they grudgingly pay GoDaddy the hefty sum.
Question
- Can GoDaddy legally do this?
- Does John and/or the company have any recourse?
- If the answer to Q1 is "Yes", how do big companies (e.g., Google, Instagram, YouTube, etc.) avoid getting exploited like this? Surely they have buy their domain from some entity, so what's to stop said entity from price gouging? Considering that the loss of, say, "google.com", for example, would be a nightmare for Google, it seems the domain-selling entity would have significant leverage over Google during price negotiations.
Clarifications
- The domain name "turquoise-cow.com" is irrelevant to the question. I just made it up.
- The domain registrar, GoDaddy, is also irrelevant to the question. This was just another arbitrary choice by me. Feel free to replace GoDaddy with any other registrar of your choosing.
- I'm primarily interested in U.S. law, but answers regarding other jurisdictions are welcome as well, of course.