August 9, 2006 7:39 AM PDT

Registrar on .eu domain hoarding: Nothing we can do

A reseller of .eu domain names has denied accusations that his business has operated unfairly by stockpiling more than 1,000 three-letter domain names and charging customers more than $1,909 to buy each one.

Stephen Wilde, of Hampshire, England-based company Really Useful Domains, told ZDNet UK that it was an "idealistic approach" to suggest that stockpiling was unethical.

The accusation came from Andrew Hooper, a new father who recently wanted to take advantage of the new .eu top-level domain to give his 2-week-old son, Christopher James, a "domain that he can use during his life."

"It should be possible for anyone to register domain names, and as many as they like. If they find someone to pass the domain name to, there's nothing we can do."
--Patrik Linden, representative, Eurid

Hooper was dismayed to find that cjh.eu was one of hundreds of domains that had been bought by Really Useful Domains, only to be resold for a minimum of $1,933 each.

Registering for domains to resell them, a practice known as warehousing, is illegal for registrars themselves; doing so would be a breach of their contracts with Eurid, short for European Registry of Internet Domain Names. Eurid, the organization set up to administer the registration of .eu top-level domains, last month launched a lawsuit against 400 American registrars it accused of warehousing.

As Wilde and his company registered all the names through a Canadian third party, no rules were broken. However, Hooper maintained that registrars had the market "sewn up."

"You have to go through a registrar, and they're monopolizing the market. Eurid has...allowed anyone who puts down a 10,000 euro ($12,889.39) deposit to have a share of this monopoly," Hooper said.

"There are no decent investigations into these companies--they don't seem to be enforcing the spirit of the law, let alone the letter of it," he added.

But Wilde argued that registrars had only "really had an advantage over the public" during the initial land rush for .eu domain names, which took place earlier this year. "Now it makes no difference at all whether you're a registrar or not," he said Wednesday.

He insisted that Really Useful Domains had not even been an accredited registrar during the land rush, and he played down the suggestion that people should not be able to stockpile names for resale at inflated prices.

"I think it's a very idealistic approach and, if you could guarantee every human on the planet would adhere to that, it would be fine, but (you can't)," he said. "I'm afraid if they didn't put enough rules in to enforce it, you only need one person on the globe to...not adhere to that, and we'd all wring our hands."

Wilde pointed out that thousands of Europeans had children who bore the same initials. "On a mathematical basis...you have probably about 20,000 people entitled to that domain for their child--which one do you give it to? (Eurid) tried to start the playing field fairly, but after that, it's not my job to say, 'You're more entitled to this,' or 'you are.'"

He also claimed that he had been unable to acquire the three-letter domain for his own son and had even tried to "buy a car registration for him, but it was 25,000 pounds ($47,726.87)," adding: "I would like it, but someone else has it. That's market forces."

Eurid itself seems to agree with this standpoint. "It should be possible for anyone to register domain names, and as many as they like," representative Patrik Linden said Wednesday. "If they find someone to pass the domain name to, there's nothing we can do...We're not particularly fond of this, but it is allowed."

In the lawsuit filed against hundreds of U.S. registrars, Eurid accused them of conspiring to set up three front companies in the United Kingdom and then registering tens of thousands of .eu domains in those companies' names, thus attempting to bypass Eurid's rules on registrars stockpiling names for their own benefit.

That case and other complaints over allocations during the land rush phase led British Parliament member Diana Wallis to file a parliamentary question on the subject for the European Commission. A response was due Wednesday but has not appeared at the time of writing, probably due to the current parliamentary recess.

A Commission representative said that as Eurid is "an independent agency, (it) does not have any supervisory role," though there is a "set of rules under which Eurid has to operate, and we have to ensure this framework is observed."

David Meyer of ZDNet UK reported from London.

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4 comments

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Plans backfiring?
It seems that Eurid, in its greedy haste to secure 10,000 euro deposits from "registrars" in the initial opening of the .eu domain, may have shot themselves in the foot. If companies like Really Useful Domains attempts to sell their 3 letter domains for outrageous amounts of money, then it's safe to assume that they won't sell them at all. It's probably the same story with the other warehousing registrars that attempted the same trick. Thus, the .eu domain doesn't get widely used and accepted as a recognized TLD, and Eurid ultimately loses. The .com domain will remain as the most recognized TLD, and the whole opportunity of introducing a new .eu TLD to break the US-owned .com monopoly is blown.
Posted by Hardrada (359 comments )
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parasitic practices
"Warehousing" or whatever term you take for domain squating is a technological parasite invented by unethical business.

There is no justification for the practice that does not initially stem from the practice itself and none of them are exceptable.

What happened to the early days of the internet when companies only registered domains they intended to use and domain squaters didn't win legal cases for domains they'd purposfully registered close to legitimate domains for blackmail purposes.

If you register domains you don't intend to use for valid server addressing, your no better than the other parasites producing invasive advertising, mal-ware, spam and similar network enabled crimes.
Posted by jabbotts (492 comments )
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As lovable as vultures
These "warehousers" or "squatters" as I prefer to call them, deserve to be on the street, in the lowest form of poverty, based on what they are contributing to the world.

How can ANYONE say they are even providing a service? They just "get to a domain first", then resell it at a huge profit. They're not actually DOING ANYTHING for the end-user except releasing the domain that they grabbed for no reason in the first place!

They make lawyers look useful!

Matthew
Posted by AgeOfPenguins_com (26 comments )
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The whole thing is a total scam, anyone in the world can buy an EU domain all they have to do is register some fake business name in a european country and EURID dont care, i have seen domains registered by people living in south america then reported them, 2 months later they register a business in some tiny european country and they get away with it, even though at the time they were not entitled to buy the domains in ther first place. The whole this is a joke at our expense.
Posted by SimonWilkins (1 comment )
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