On 27 April 2018, the European Commission published a proposal for a new European Regulation in relation to the .EU Top Level Domain (TLD), planned to replace the current Regulations that deal with .EU. In short, this is because the current Regulations are seen as outdated and no longer able to deal appropriately with the fast paced rapidly changing world of domain names and internet governance. If the proposed new legislation is adopted, it may eventually mean that we will see a radical shake up in the .EU namespace, for example in relation to the Registry, the registrars, the Alternative Dispute Resolution (ADR) procedures and the eligibility of end users.

.EU TLD background

Domain names under .EU first became available for registration almost 13 years ago on 7 December 2005. Back then the internet was a very different and much simpler place, with only a handful of generic Top Level Domains (gTLDs), like .COM and .NET, and around 200 country code Top Level Domains (ccTLDs) corresponding to a particular country (such as .IT for Italy or .NZ for New Zealand). The launch of .EU was an exciting internet development because it was the first geographical TLD to cover a collection of countries as opposed to just one (.ASIA was not launched until 2007). .EU in Cyrillic, or .ею, was launched on 1 June 2016, and domain names under .EU or .ею can contain characters from any official European language script, including, for example, the Swedish å, the German ü, the Romanian ș and characters from the Bulgarian (Cyrillic) and Greek alphabets as a whole.

At the end of March 2018, almost four million domain names had been registered under .EU and .ею. To put this into perspective, only five ccTLDs currently surpass that: .CN (China) with over 20 million registrations, .DE (Germany) with over 16 million, .UK (the United Kingdom) with over 12 million, .NL (the Netherlands) with over 5.8 million and .RU (Russia) with over 5.3 million (.COM easily remains king though, with over 130 million registrations). The top ten countries with the most .EU registrations at the end of March 2018 were Germany (1,008,921), the Netherlands (507,014), France (349,263), the United Kingdom (323,166), Italy (262,589), Poland (261,192), Austria (182,881), Czech Republic (155,996), Belgium (137,960), and Spain (112,449).

It is generally acknowledged that .EU has been a relatively popular and successful TLD, and it is functioning well and continuing to grow. In particular at the end of March 2018 the usage statistics were relatively impressive:

  • 79% of domain names under .EU and .ею were resolving;
  • 88% of resolving domain names contained content; and
  • 81% of resolving domain names had a functioning mailbox set up.

Given this, it can be seen that the .EU TLD is certainly serving its intended purpose to enable European businesses and citizens to participate in e-commerce and increase their participation in the online single market, and to reinforce security and trust in the online environment. However, the internet has seen dramatic changes since .EU was launched over a decade ago, particularly in relation to the expansion of the domain name space and the introduction of over 1,300 new gTLDs such as .TOP, .CLUB, .APP or .ONLINE. In view of this, the European Commission decided to investigate whether the .EU legal framework was still serving its intended purpose. In May 2017 it therefore undertook a Regulatory Fitness and Performance Programme (REFIT) review of the current European Union Regulations governing the .EU TLD, namely:

  • Regulation 733/2002 establishing .EU; and
  • Regulation 874/2004 laying down public policy rules concerning the implementation and functions of .EU.

Review conclusions

The review concluded that .EU was governed by an outdated legal framework containing obsolete or rigid provisions that could not easily be updated and were time-consuming and costly to change (for example in relation to technical updates for Internationalized Domain Names using characters outside of those used for the English language). In this respect it should be noted that Regulation 874/2004 contains detailed provisions about the launch of .EU, for example concerning the “sunrise” procedures giving priority to holders of prior rights and the treatment of any subsequent sunrise disputes, and now that the launch has taken place such provisions are irrelevant. In the Commission’s view, this legal framework did not therefore provide for an optimum internet governance structure in terms of oversight and accountability in line with the Commission’s stated approach. Increasing difficulties could therefore be foreseen for .EU in a time of rapidly changing markets.

However, the Commission concluded that the issues were not “dramatic” and currently only affected those directly involved in the functioning and management of .EU. However, it found that if precautionary action was not taken, the problem was likely to become large enough to affect end users in terms of the sustainability of the .EU TLD and its attractiveness compared to other TLDs. It was noted that there were signs of relative decline in the performance of the .EU TLD.

In view of the findings of the REFIT review, the Commission’s proposal for a new European Regulation to replace the current Regulations governing .EU aims to:

  • remove outdated legal and administrative requirements and create a lightweight, principles-based framework that is future-proof and allows .EU to adapt to rapid changes in relation to the TLD market and the dynamic digital landscape;
  • continue incorporating and promoting the European Union’s priorities in the online world, ensuring a multistakeholder governance structure (including the creation of a multistakeholder Council) that reflects both technical and governance best practices and serves the public interest of the European Union;
  • lift the strict prohibitions on vertical separation, namely the rules requiring a strict separation between organisations managing domain names (Registries) and those selling domain names to end-users (registrars), while providing clear provisions safeguarding the application of the rules of fair competition in accordance with the European Union’s principles; and
  • relax the current eligibility criteria for registration of .EU domains to allow any European Union citizens to register a .EU domain name, independently of their place of residence.

With regard to the last point, .EU domain names are currently available for registration by any person, company or organisation based in the European Union, Iceland, Norway or Liechtenstein. Expanding this to give citizens of the European Union the right to register, regardless of where they are actually based, is completely in line with the general trend of ccTLDs over the past few years to relax their eligibility requirements and thus broaden their customer base. As mentioned above, at the end of March 2018 there were 323,166 .EU domain names with registrants based in the United Kingdom. These registrants will have to either alter this or risk losing their domain names when the United Kingdom exits the European Union (as per the Commission’s announcement of 28 March 2018). However, in the event that the proposal has been adopted before then, one effect of the relaxation of the eligibility criteria will be that citizens of the European Union based in the United Kingdom will be able to keep their domain names.

If adopted, the proposal could also mean that the current Registry operator, EURid (headquartered in Belgium) may change, as well as the current ADR providers dealing with disputes concerning .EU domain names (the World Intellectual Property Organization in Geneva and the Czech Arbitration Court in Prague).

What’s to come?

The Commission has stated that the proposal responds to a greater ambition for the use of .EU and ensures that the benefits linked to it can reach as many European Union citizens as possible in the near future. By creating an innovative, principles-based, future-proof regulatory framework that does not require legislative revision to implement developments in the domain name industry, the Commission hopes that the proposal will foster innovation in the .EU ecosystem, both at the level of the Registry and in the downstream markets of registrars and registrants, and result in better management and functioning of the .EU TLD. This will also reassure internet users that .EU domain name owners are genuinely connected to the European Union and that any commercial entity using a .EU domain name is subject to European Union law.

It was possible to give feedback on the European Commission’s proposal until 17 July 2018 via a link on its website, and the Commission will present a summary of the feedback received to the European Union Parliament and Council for consideration during the legislative debate.

This article first appeared in Digital Business Lawyer – July 2018 Volume: 20 Issue: 7