US firms accused of buying up European cyberspace

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The Independent Online

The launch of Europe's own internet domain name has sparked a transatlantic legal battle with US firms accused of moving in secretly to make an illegal profit. Around 74,000 ".eu" names have been frozen because of fears that a New York-based syndicate has broken the law with multiple applications designed to abuse the system.

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.

EURid accused three UK firms: Ovidio Ltd, Fausto Ltd and Gabino Ltd of acting as a front for 400 registrars in New York.

Sites using the 74,000 domain names will not be blocked, but their resale will be stopped. EURid will ask a Belgian court to return the names.

The row has cast a shadow over the otherwise successful introduction of the ".eu" domain name. When it was launched in April there was a rush of registrations from European businesses and individuals, many paying just €10 (£7) per annum. Almost two million European web addresses are now active, though a number of addresses are in dispute with companies or individuals claiming they have a prior right to them. These include the "sex.eu" domain name.

Patrik Linden, spokesman for EURid, said it was impossible to put a figure on the amount of money that the New York syndicate stands to gain because the prices paid for domain names vary widely.

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