US firms “grabbed” EU domain names
74000 European Union domain names (.eu) have been put on inactive after EURid, the responsible registrar, investigated claims that American companies had been buying EU domains names through companies set up in the EU specifically for this purpose. This setup allowed the US companies to have multiple direct connections to EURid, giving them an advantage over “legit” EU domain registration companies. They planned to sell the registered domain names for large profits, which would not have been hard as many of the names were premium domains.
Until April, Europeans had to choose between a national domain, such as “.fr” for France, or a general one like “.com”, which is often seen as American.
But the European Registry of Internet Domain Names (EURid) said that the syndicate used three British-based companies to exploit the “.eu” launch. It claims they stockpiled names with the aim of selling them later at inflated prices.
Domain names with special commercial value can be sold for large sums of money. Earlier this year the “sex.com” domain name was reportedly sold for more than $12m (£6.5m) in the US.
Under the rules laid down by the EU, registrars can apply for a domain name on behalf of an existing client. But the practice of warehousing - buying and holding names in the hope of selling them later - is illegal. Registrars can be based outside the EU but those operating the names must be based in Europe.
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Administrator @ July 31, 2006