Internic "Copycat" May Deceive Consumers: FTC Staff

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.