Transatlantic battle to stop sale of .brit and .usa domain names

A US court has issued a temporary order to shut down three British companies that the Office of Fair Trading and the US Federal...

A US court has issued a temporary order to shut down three British companies that the Office of Fair Trading and the US Federal Trade Commission (FTC) say are involved in marketing and selling £700,000 worth of bogus Internet domain names.

The move freezes the assets of the companies and revokes the Web addresses the companies used - and, said FTC attorney Steven Wernikoff. One led to an adult site; the other opened an information portal..

The FTC announced the action against British companies TLD Network, Quantum Management (GB) and TBS Industries.

Wernikoff said the companies had been selling .brit and .bet Web addresses for some time. After the 11 September attacks, the companies also started offering .usa for sale.

"This really ramped up after the 11 September terrorist events," Wernikoff said. "There was much more vigorous spam going out telling people to be patriotic."

That extra marketing push is what put the companies on the FTC's radar screen in September and October, he said.

The FTC said the companies sold the Web addresses for $59 (£41) each, and Wernikoff said some documents obtained from the companies suggest they made at least $1m (£708,000) from the sales.

"The companies deny all the allegations and will introduce a full position in court at the appropriate time," said David Berten, the solicitor representing the companies.

Berten questioned what jurisdiction the US federal court and the FTC have over his clients.

"This is a question that gets decided on a case-by-case basis, and it is not clear in this case if the FTC has the authority to oversee everything that has gone on," Berten said.

Wernikoff said the companies maintained they were trying to create a new Web addressing system and did nothing wrong.

"This really isn't about that. It is about the deceptive marketing of a product," he said. "There was essentially no disclosure at all that what these people were purchasing was any different from .com names."

The companies told buyers that they were receiving a domain name that would work just like a .com name, which is untrue, he said.

Wernikoff said this was the first example of the FTC and the Office of Fair Trading working together to shut down companies doing business on the Web. "Frankly, it is something that is going to happen more and more, as the Internet has brought countries closer together," he said.

Read more on Antivirus, firewall and IDS products