This article was written by Kieren McCarthy for
The
Register. It has been reproduced with
permission.
Non-profit organisation EURid has taken legal action after a
review of the system for .eu domains (which went live in April)
revealed a small number of companies had registered several hundred
phantom companies in order to manipulate the system.
A EURid spokesman told The Register that every one
of the 400 registrars had been sued for breaching its contract with
the company because they were "warehousing" domains – storing
them in order to sell them on.
All the 74,000 domains registered by the 400 registrars were now
in the hands of just three companies – Ovidio Ltd, Fausto Ltd
and Gabino Ltd, he explained. "We are convinced the registrars are
just a front, and can be looked on as one and the same."
The company is waiting for court proceedings to begin in
Brussels in October. EURid then hopes to make all the domains in
question, which are currently "on hold", available again as soon as
possible, although it is unlikely to be a position to do so until
at least the end of the year.
EURid stressed, however, that this legal action was only the
start of its review and it will continue to investigate other
complaints about phoney registrars. It has already suspended an
unspecified number of other domains because the owner was unable to
prove they lived within the EU.
Since EURid's computer system worked by creating a virtual queue
of accredited companies who then took it in turns to try to
register a particular .eu domain, the €10,000 registration fee for
each company made it worthwhile for a few large US companies to
flood the system with front companies and then profit from selling
valuable .eu domains later.
The result was that a large number of domains were taken by
companies unknown in the registrar industry, causing an immediate
outcry from more established companies.
Despite the controversy, the .eu top-level domain has been an
unexpected success with EURid announcing earlier this month that it
has sold its two millionth .eu domain in just three months.
© The Register
2006
