On August 27, 1997, the staff of the Federal Trade Commission issued a letter stating that Internic Software, Inc., an Australian organization mimicking the official Internet domain name registration services of Network Solutions and its InterNIC activity, may be in violation of a federal law prohibiting deceptive acts or practices. Network Solutions, through its InterNIC activity, registers Internet domain names and assures that different Web sites do not have the same name. Individuals and organizations can apply to InterNIC to register a domain name at their Internet address at http://www.internic.net. The cost of registering a name is $100 for two years.
In response to a request from Network Solutions, FTC staff issued an advisory opinion stating that Australian-based Internic Software's copycat Web site, http://www.internic.com , which acts as a broker to register domain names for a charge of $250, may mislead consumers into thinking they are dealing with the official registration site, in violation of federal law. FTC staff also referred the matter to the Australian Competition and Consumer Commission, which investigated Internic Software for violations of Australian law.
Today, the Australian Competition and Consumer Commission (ACCC) announced that it has charged Internic Technology Pty Ltd. and Peter Zmijewski with misleading consumers and has asked a federal court in Australia to enjoin the company and its principal from continuing to operate a business using the "Internic" name and to provide consumers refunds in the amount of the difference between what it collected and the actual $100 registration cost.
"This is an excellent example of cooperation between law enforcers in different countries which benefits consumers in the international marketplace of the Internet," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection.
Copies of the press release announcing the FTC staff opinion and the ACCC charges are attached.
Copies of FTC press releases are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. Copies of ACCC press releases are available at http://www.accc.gov.au To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
Copycat internet domain name business heads to court
1 May 1998
In Internet domain name registration business has drawn Australian Competition and Consumer Commission action for alleged misleading conduct.
In a statement of claim filed in Sydney today the ACCC alleges Internic Technology Pty Ltd and Peter Zmijewski are misleading consumers by using an almost identical domain name as the exclusive registrar of second level domain names in the .com, .net, .org, .gov, .edu top level Internet domains (the InterNIC) and by operating a website at http://www.internic.com.
The InterNIC is a facility operated by Network Solutions Inc, on contract with the United States government, and can be found at http://www.internic.net.
The ACCC alleges that:
consumers looking for the InterNIC often enter "internic" or "internic.com" into their web browsers and end up at the site operated the respondents where the respondent sells brokers domain name registration services;
the use of the name "internic.com" is likely to create the false impression that the respondent's business is, or is affiliated with, the InterNIC;
consumers went to the respondent's website to register a domain name directly with InterNIC; and
consumers have used the respondents services on believing they were using services provided by InterNIC as a result of the respondent's misleading and deceptive conduct.
The fee charged by the respondents was between $US220 and $US250. The fee charged by InterNIC has ranged between $US70 and $US100.
The ACCC believes the respondents have registered more than 12,000 domain names in the past 12 to 18 months. These domain names have been registered to consumers from all over the world including Australia, the US, Canada, France, Norway, Spain, the United Kingdom, Switzerland and Germany. The matter was raised with the ACCC by the United States Federal Trade Commission, which had received numerous complaints from consumers in the US, because Internic Software and Mr Zmijewski both reside in Australia.
In the past couple of days the respondents have apparently altered their website but the ACCC does not believe these changes satisfactorily deal with the alleged conduct.
The ACCC is seeking Federal Court orders including:
various declarations that the conduct is misleading and deceptive;
injunctions preventing the operators from continuing to operate a business using the name Internic;
refunds to consumers of that part of the amount collected by the respondents not passed on to the InterNIC; and
the electronic publication of information notices.
Professor Allan Fels, Chairman, pager (016) 373 536
Ms Lin Enright, Director, Public Relations, (02) 6243 1108
1 May 1998
For Release: Agust 21, 1997
The staff of the Federal Trade Commission issued a letter today stating that Internic Software, Inc., an Australian organization copying the official domain name registration services of Network Solutions and its InterNIC activity, may be in violation of a federal law prohibiting deceptive acts or practices. Network Solutions, through its InterNIC activity, registers Internet domain names and assures that different Web sites do not have the same name. Individuals and organizations can apply to InterNIC to register a domain name at their Internet address at http://www.internic.net . The cost of registering a name is $100 for two years.
In response to a request from Network Solutions, FTC staff issued an advisory opinion stating that Australian-based Internic Software's copycat Web site, http://www.internic.com , which acts as a broker to register domain names for a charge of $250, may mislead consumers in violation of federal law. FTC staff has also referred the matter to the Australian Competition and Consumer Commission, which now is investigating Internic Software for violations of Australian law.
Consumers searching for Network Solutions' InterNIC site often enter "internic" or "internic.com" on their Web search engine or Web browser, calling up the internic.com Website operated by Internic Software, Inc., rather than the internic.net site operated by Network Solutions. As a broker, Internic Software registers domain names for consumers by going through Network Solutions, which has sole authority through the National Science Foundation, to register domain names within the top level domains -- .com, .org, .net, .edu, and .gov. Using its copycat site, Internic Software has registered over 2,000 domain names so far.
According to a letter from Network Solutions to FTC staff, consumers complained that they were misled by the similar Web address, did not realize they were dealing with a broker, but believed they were registering at the site operated by Network Solutions. In addition, Network Solutions' letter notes that it has not received payment from Internic Software for the majority of consumers who registered their domain names through them.
The FTC staff letter notes that the Commission has authority to prohibit unfair or deceptive acts that are likely to mislead consumers acting reasonably.
"The use of a domain name <internic.com> virtually identical to that of the official domain registration site, combined with the provision of nearly identical domain registration services to those offered by Network Solutions, is likely to create a false impression that the site is owned and operated Network Solutions, whose site is located at http://www.internic.net " according to the staff advisory opinion. "The disclaimer that appears on certain pages of Internic Software's site, to the extent that it is even seen by consumers during the registration process, is inadequate to cure this false impression," the opinion says.
The advisory opinion also notes that if Internic Software offers domain name registration services, accepts payment for the services and then fails to provide them by making payments to Network Solutions, that could be an additional violation of federal law.
The views expressed in the letter are those of the FTC staff. They are not binding upon the Commission.
Copies of the staff advisory opinion letter are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov and also from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
Claudia Bourne Farrell
Office of Public Affairs
Bureau of Consumer Protection