Alleged dirty business practices surrounding the registration process for the European Union's new top-level domain (TLD) have resulted in more than 74,000 .eu web addresses being suspended and 400 registrars sued for breach of contract.
Eurid, the nonprofit organisation in charge of the .eu registry, took legal action after determining that a syndicate of registrars had systematically acquired domain names with the intent of selling them, a process known as "warehousing," which is not permitted, the organization said on Monday.
400 registrars, or three?
All of the 74,000 domains registered by the 400 registrars are actually in the hands of three UK-based companies: Fausto, Gabino and Ovidio, according to Eurid. The organisation is convinced that the domain name holders and the registrars are one and the same.
The three companies could not be reached for comment. They appear to have identical websites, with static text describing their business and only the name of the company different in each case.
Court proceedings will begin shortly, after which Eurid hopes to make the names available for registration, it said.
Critics have said that the .eu domain name registration process is partly to blame for some of the alleged fraudulent behaviour.
Earlier this year, Bob Parsons, CEO of domain name registrar GoDaddy, accused Eurid of inept organisation, allowing companies to cheat the system by setting up bogus registrars to work on their behalf.
Eurid's registry system is designed to give each registrar equal access to the database, and equal chances to register unclaimed names, according to Parsons. The registrars effectively "line up" to make a request for a .eu domain name. If the name is available, the registrar gets it for its customer. If it's not, the registrar goes to the back of the line to wait for another turn.
Parsons claimed that some companies spotted a loophole in the system: by creating additional, bogus registrars and applying for accreditation for them, they were able to multiply their chances of successfully making registrations.
'Phantom registrars' were created to hijack the .eu landrush, Parsons claimed. Eurid claims that it constantly monitors the registrations of .eu domain names to ensure that all name holders are based in the EU, as required by the .eu public policy rules. The organisation also strives to verify that all accredited registrars are acting in the best interest of consumers and businesses, it said.