REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation, functioning and effectiveness of the .eu Top Level Domain
Date: 2011-10-05
Institutions: European Commission
Subjects: EU office or agency, European symbol, Internet address, appeal to the Court (EU), arbitration, operation of the Institutions, registered trade mark

EUROPEAN COMMISSION 

Brussels, 5.10.2011 
COM(2011) 616 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on the implementation, functioning and effectiveness of the .eu Top Level Domain 

(Text with EEA relevance) 

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REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on the implementation, functioning and effectiveness of the .eu Top Level Domain 

(Text with EEA relevance) 

1. 

BACKGROUND 

In April 2011, the .eu Top Level Domain (TLD) celebrated its fifth anniversary. During those 
five years the .eu TLD became the 9th largest TLD and the 5th largest country code TLD in 
the world. With more than 3.3 million registrations, the .eu TLD has become a valued option 
for Europeans when choosing a domain name for their Internet presence. 

This  Report  to  the  European  Parliament  and  the  Council  concerns  the  implementation, 
effectiveness and functioning of the .eu TLD over the past two years. In line with Article 8 of 
Regulation  (EC)  No  733/2002  on  the  implementation  of  the  .eu  Top  Level  Domain,  the 
Commission  is  required  to  submit  a  report  to  the  European  Parliament  and  the  Council  one 
year after the adoption of the Regulation and then every two years. 

This Report follows on from the Reports of 20071 and 20092, and covers developments of the 
.eu  TLD  from  1  April  2009  to  31 March 2011.  It  focuses,  among  other  things,  on  the 
introduction of Internationalised Domain Names. 

2. 

THE .EU LEGAL FRAMEWORK AND BASIC PRINCIPLE 

The .eu TLD was established by the following legal acts: 

–  Regulation (EC) No 733/2002 of the European Parliament and of the Council of 22 April 
2002 on the implementation of the .eu Top Level Domain (as amended)3 (the Framework 
Regulation); 

–  Commission  Regulation  (EC)  No  874/2004  of  28  April  2004  laying  down  public  policy 
rules  concerning  the  implementation  and  functions  of  the  .eu  TLD  and  the  principles 
governing registration (as amended)4 (the PPR Regulation). 

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COM(2007) 385  final,  Communication  from  the  Commission  to  the  European  Parliament  and  the 
Council — Report on the implementation, functioning and effectiveness of the ".eu" TLD (6 July 2007). 
COM(2009) 303 final, Report from the Commission to the European Parliament and the Council on the 
implementation, functioning and effectiveness of the ‘.eu’ TLD (26 June 2009). 
Regulation  (EC)  No  1137/2008  of  the  European  Parliament  and  of  the  Council  of  22  October  2008 
adapting  a  number  of  instruments  subject  to  the  procedure  laid  down  in  Article  251  of  the  Treaty  to 
Council Decision 1999/468/EC with regard to the regulatory procedure with scrutiny — Adaptation to 
the regulatory procedure with scrutiny — Part One (OJ L 311, 21.11.2008, p. 1). 
Commission  Regulation  (EC)  No  1654/2005  of  10  October  2005  (OJ  L  266,  11.10.2005,  p. 35)  and 
Commission Regulation (EC) No 1255/2007 of 25 October 2007 (OJ L 282 26.10.2007, p. 16). 

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In the reported period, Commission Regulation (EC) No 874/2004 was amended in order to 
introduce  the  Internationalised  Domain  Names  (IDNs)  under  the  .eu  TLD.  The  amending 
Regulation (EC) No 560/2009 was adopted on 26 June 20095. 

The Registry selected by the Commission6, EURid (European Registry for Internet Domains), 
is  responsible  for  the  organisation,  administration  and  management  of  the  .eu  TLD.  It  is  an 
independent  organisation  that  takes  all  necessary  decisions  autonomously,  in  line  with  the 
Framework  Regulation7.  The  Commission  supervises  the  Registry’s  work  without  getting 
involved in its daily operations. This model of separation of duties satisfies the principles of 
non-interference, self-management and self-regulation, which underlie the Internet8. 

3. 

INTRODUCTION OF INTERNATIONALISED DOMAIN NAMES (IDNS) 

3.1. 

IDNs under the .eu Top Level Domain 

The legal framework for the .eu TLD provides that the Registry must register domain names 
in  all  the  alphabetic  characters  of  the  official  languages  of  the  EU  (composed  of  Latin, 
Cyrillic and Greek scripts) when adequate international standards become available9. 

Initially, domain  names could  only  contain characters  from  a  limited  character  set  based  on 
the  English  alphabet  (usually  a-z,  0-9  and  ‘-’).  This  did  not  allow  for  the  registration  of 
domain  names  containing  special  Latin  characters  in  some  EU  languages  or  in  non-Latin 
scripts (Bulgarian Cyrillic and Greek/Cypriot alphabets). 

To address this problem, the international Internet community has been working for several 
years to develop  International Domain Names  (IDN),  which allow the  use  of  a much larger 
range  of  special  characters  and  non-Latin  script  characters  (for  example,  characters  with 
diacritics such as ‘é’, ‘ö’, ‘ç’ or ‘č’ and most non-Latin scripts). 

On  26  June  2009,  the  Commission  adopted  Regulation  (EC)  No  560/2009  amending 
Regulation (EC) No 874/2004 in view of the introduction of IDNs for the .eu TLD10. 

On 10 December 2009, EURid began the registration of IDNs. Since then domain names have 
been available in all 23 official languages of the European Union up to the final dot of any .eu 
address (i.e. in Latin, Cyrillic and Greek alphabets). 

The introduction of IDNs attracted much attention from the very start. In the first hour of its 
launch, 38 172 IDNs were registered under the .eu TLD. At the end of March 2011, there were 
56 961 domain names registered using IDNs. 

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Commission Regulation (EC) No 560/2009 of 26 June amending Regulation (EC) No 874/2004 (OJ L 
166, 27.6.2009, p. 3). 
Commission Decision of 21 May 2003 on the designation of the .eu Top Level Domain Registry. 
See recital 12, Articles 2(a), 3(1)(c), 3(2) of Regulation (EC) No 733/2002. 
See recital 9 of Regulation (EC) No 733/2002. 
Under  Arti.6  of  Regulation  (EC)  No  874/2004  ‘the  Registry  shall  perform  the  registration  of  domain 
names  in all  the alphabetic characters of the official languages when adequate international standards 
become available’. 
The amendment was due to inform the public of the introduction of IDNs and update the list of names 
in the Annex to the Regulation. 

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3.2. 

IDNs at the .eu Top Level Domain 

The  introduction  of  IDNs  at  the  top  level,  i.e.  on  the  right-hand  side  of  the  last  dot  of  a 
domain  name,  is  a  matter  that  falls  within  the  competence  of  ICANN11.  On  16  November 
2009,  ICANN  launched  the  IDN  country  code  TLD  Fast  Track  Process12  to  facilitate  the 
introduction  of  Internet  Top  Level  Domain  extensions  representing  country  codes  (e.g.  .gr, 
.bg, .eu) using non-Latin characters (e.g. Cyrillic, Greek, Arabic and Chinese characters). The 
process entails three steps: (i) the registry of a country applies to operate an IDN ‘string’ (the 
given version of its country code (cc) TLD in another script), together with the support of the 
Internet  community  on  its  territory  (‘community  support’)  and  the  reason  for  its  choice 
(‘meaningfulness’ criterion); (ii) the requested string is then evaluated by ICANN who passes 
it  on  to  an  independent  committee  to  check  for  possible  conflict  with  existing  TLD  strings 
(‘confusability’  criterion);  (iii)  once  approved,  the  new  string  is  allocated  to  the  Registry 
(‘delegation’). 

In  December  2010,  ICANN  received  a  total  of  35  requests  from  22 countries.  To  date, 
Russian, Chinese and Arabic scripts have been introduced at the top level of their respective 
country codes (. РФ for Russia, .مصر for Egypt, .لسعودية for Saudi Arabia, etc.). 

EURid  submitted  an  application  to  ICANN  to  open  registration  for  the  Cyrillic  and  Greek 
versions  of  the  .eu  TLD  on  5  May  2010.  Its  application  was  based  on  submissions  to  the 
Commission from Cyprus, Greece and Bulgaria13 of their preferred versions of the .eu suffix 
(.ευ in Greek and .ею in Cyrillic respectively). 

ICANN  acknowledged  the  fulfilment  of  the  first  two  criteria  (community  support  and 
meaningfulness) at the meeting in Singapore and confirmed in a letter to the Commission. The 
third stage of ICANN's review — review of the requested strings for ‘confusability’- is still 
pending.  

4. 

REGISTRATION AND USE OF THE .EU DOMAIN NAMES 

In  the  reporting  period  the  .eu  TLD  continued  to  grow  steadily,  in  line  with  the  other 
European  country  code  TLDs  (+6 %  in  2010  and  +5 %  in  2009).  There  were  3.4  million 
registrations, making the domain the ninth largest TLD in the world and Europe’s fourth most 
popular  ccTLD.  This  demonstrates  that  the  .eu  TLD  offers  a  valuable  and  tangible  tool  for 
companies, NGOs and individuals wishing to express their European identity online. 

In  Europe,  only  three  ccTLDs  remain  in  a  stronger  position  in  terms  of  number  of 
registrations: .de (Germany), .uk ( UK) and .nl (the Netherlands). Globally, only four generic 
TLDs (.com, .net, .org and .info) and one ccTLD (.cn for China) have more registrations. The 
largest markets for .eu domains are Germany with 31 %, the Netherlands (13 %), the United 
Kingdom (10 %), France (9 %) and Poland (6 %). 

After  an  initial  period  of  rapid  growth,  the  Registry  has  reached  a  plateau.  The  macro-
objective  of  the  Registry  is  to  become  the  number  3  domain  in  the  EU  countries  and  to 
consolidate positioning in these areas where it is already number 2 or 3. Given the historical 

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ICANN  (Internet  Corporation  for  Assigned  Names  and  Numbers)  is  a  non-profit,  private-sector 
corporation For more information see: http://www.icann.org/. 
For more information on The Fast Track Process see: http://www.icann.org/en/topics/idn/fast-track/. 
Cyprus and Greece - October 2008, Bulgaria - February 2009. 

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trend  and  the  current  market  situation,  EURid’s  goal  is  to  maintain  a  steady  growth  rate  in 
registrations  of  around  5-8 %  per  year.  The  Registry  established  a  set  of  marketing  and 
communication goals to achieve these objectives (e.g. to build on a single message: .eu shows 
that  you  are  European,  to  introduce  of  multiyear  registrations,  to  further  develop  customer 
service). 

5. 

FUNCTIONING OF THE REGISTRY 

5.1. 

The Registry 

EURid was appointed by the Commission as the .eu Registry in 200314 following a call for 
expressions of interest15. 

On 12 October 2004, the Commission and EURid concluded a Service Concession Contract 
for  an  initial  term  of  five  years  with  the  possibility  of  renewal16.  In  2009  the  Service 
Concession Contract was extended until 12 October 201417. 

EURid is a Europe-wide non-profit organisation with its head office in Diegem (Belgium) and 
regional offices in Stockholm, Prague and Pisa. It comprises three founding members: DNS 
Belgium (the .be registry), Istituto di Informatica e Telematica (the .it registry), Stiftelsen för 
Internetinfrastruktur (the .se registry) and four associate members: ARNES (the .si registry), 
CZ.NIC  (the  .cz  registry),  ISOC-ECC  (the  European  Chapters  Coordinating  Council  of  the 
Internet Society) and Businesseurope (a confederation of 39 industry-related federations from 
33  countries).  The  main  servers  are  located  in  Belgium  (Brussels)  and  in  The  Netherlands 
(Amsterdam). 

5.2. 

Relations with registrars 

By law, the .eu Registry itself does not act as Registrar18. A priority for EURid is to continue 
to  provide  quality  service  to  approximately  1 000  accredited  registrars.  EURid  evaluates  .eu 
customer satisfaction on a regular basis. According to the latest Registrar satisfaction survey 
for the .eu domain carried out in Q4 2010, 34 % of those surveyed gave it the top rating for 
reliability. This is an increase of 4 % on 2009. 45 % of respondents considered it to be a good 
investment.  82 %  believe  that  the  .eu  domain  lends  added  value  to  small  to  medium-sized 
businesses. On average, 62 % would recommend the .eu TLD to consumers. EURid operates a 
round-the-clock  support  service  for  its  registrar  community.  Registrars,  especially  overseas 
registrars, appreciate the service which, in the past year, has improved significantly in terms 
of responsiveness, quality of customer service and ease of contact with on-call EURid staff. 

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See footnote 6. 
See recital 13, Article 3(1)(b) of Regulation (EC) No 733/2002. 
See  recital  12,  Article  3(1)(c)  of  Regulation  (EC)  No  733/2002.  Under  Article  I.2  of  the  Service 
Concession  Contract  between  EURid  and  the  Commission  ‘The  contract  is  concluded  for  an  initial 
period of five years [..] [and] may be extended for another five years by both contracting parties in the 
form of a supplementary contract’. 
On  12  December  2008,  the  Commission  and  EURid  signed  a  supplementary  contract  renewing  the 
initial contract for another five years. The supplementary contract came into force on 12 October 2009.  
See Article 3(4) of Regulation (EC) No 733/2002, and recitals 2, 3, 4 and Article 4 of Regulation (EC) 
874/2004. 

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5.3. 

Financial situation 

The financial situation of the .eu Registry remained stable in the reporting period. 

The  financial  strength  of  the  Registry  is  a  key  element  in  ensuring  credibility  of  the  .eu 
domain.  The  Commission  closely  scrutinises  the  financial  situation  of  the  Registry  in  line 
with the provisions of the legal framework and the Service Concession Contract. The Registry 
is  an  external  organisation  whose  decisions  are  autonomous.  Complete,  on-the-spot 
accounting reviews are performed by an independent financial auditor. The supervisory role 
of the Commission is exercised by means of various tools including reviews of the auditors’ 
remarks, quarterly and annual financial reports, quarterly progress reports, budget proposals, 
and strategy and marketing plans. Financial matters are regularly discussed with the Registry 
at quarterly meetings and service-level meetings. 

At  the  start  of  the  .eu  TLD  operations,  revenues  generated  by  the  large  number  of  domain 
registrations were significantly higher than the costs of the Registry. The consequent annual 
surpluses were transferred to the EU budget. In order to limit the surpluses and recognise the 
declining  costs  incurred  per  domain  name  due  to  the  increasing  volume  of  registration,  the 
Registry has gradually reduced the registration fees for registrars to EURid from € 10 to the 
current € 4 per domain name. 

The  key  financial  aspects  of  the  Registry  remained  stable  in  2009  and  2010.  Both  the 
revenues  and  costs  of  the  Registry  have  been  around  €  12  million  for  both  years. 
Consequently, the net financial result has been more balanced than in previous years with the 
surplus  of  €  1.2  million  transferred  to  the  EU  budget  in  2009.  Preliminary  figures  for  2010 
suggest that the surplus will be € 400 000. 

Changes  in  the  budgeted  and  actual  costs  of  the  Registry  were  closely  scrutinised  by  the 
Commission, in particular costs relating to marketing (€ 2.5 million in 2009 and € 3.2 million 
in 2010) and human resources (€ 3.7 million in 2009 and € 4.3 million in 2010). The increase 
in  costs  was  justified  by  the  need  for  enhanced  quality  of  service.  Examples  include 
deployment  of  DNSSEC  (Domain  Name  System  Security  Extensions),  expansion  on  mirror 
sites and the introduction of IDNs. 

The  Registry  maintains  four  types  of  financial  reserves:  depreciation,  investments,  social 
liabilities and legal liabilities. Over the reporting period, the total level of reserves remained 
stable: € 6 million in 2009 and € 5.5 million in 2010. At the end of 2010 this total was divided 
between  the  reserve  for  depreciation  (€  1.6  million),  the  reserve  for  investments  (€  0.8 
million),  the  reserve  for  social  liabilities  (€  2.3  million)  and  the  reserve  for  legal  liabilities 
(€ 0.8 million). 

5.4. 

Business continuity and resilience 

5.4.1.  Business continuity 

As required by the Service Concession Contract, the Registry operates in line with a Business 
risks  and 
Continuity  Plan,  which  covers 
countermeasures. 

the  Registry’s  core 

functions, 

related 

On  25  April  2009,  EURid  conducted  a  test  of  its  systems  as  part  of  its  business  continuity 
plan  by  simulating  a  disaster  and  monitoring  the  recovery.  The  test  was  audited  by  a  third 
party  (PricewaterhouseCoopers).  The  results  of  the  test,  along  with  responses  from  the 

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domain  community,  have  shown  that  EURid  met  the  high  standards  required  in  this  area19. 
The second exercise to test business continuity was planned for 2010 but had to be postponed 
due  to  a  delay  in  the  mirror  site20  transfer  from  Prague  to  Amsterdam.  The  exercise  is  now 
scheduled for Q3 of 2011. 

EURid also signed an agreement for Domain Name System anycasting of the .eu TLD with 
Netnod (August 2010). Anycasting is an Internet routing methodology that enables an online 
service  to  be  available  from  many  different  locations  around  the  world,  using  the  same  IP 
address.  By  signing  the  agreement,  the  robustness  and  resilience  of  the  .eu  name  server 
infrastructure was improved and the domain resolution response time was shortened. 

5.4.2. 

Security 

In  September  2010,  EURid  completed  the  implementation  of  the  Domain  Name  Security 
Extensions  (DNSSEC)  protocol  for  the  .eu  TLD.  The  DNSSEC  is  a  protocol  to  verify  the 
authenticity  of  the  display  name  server  responses  (websites)  up  to  the  Internet  root  zone  in 
what  is  called  a  ‘chain  of  trust’21.  DNSSEC  is  designed  to  protect  the  Internet  users  from 
forged DNS data. DNSSEC can only reach its full potential if all the zones in the hierarchical 
DNS  tree  are  signed.  EURid  is  simplifying  the  process  of  signing  a  .eu  domain  name  by 
introducing a signing service. It organises training seminars22 for .eu registrars to encourage 
them  to  promote  DNSSEC  to  their  customers,  who  in  turn  disseminate  the  protocol  to  the 
Internet players (ISPs, webmasters, etc.). 

5.4.3.  Phishing and other malicious activities 

The  Registry  has  been  applying  measures  to  counter  phishing  and  other  types  of  malicious 
online  behaviour23  on  a  daily  basis.  Domain  names  in  particular  are  checked  against 
compliance  with  the  eligibility  criteria24  and  new  registrations  are  screened  for  suspicious 
patterns or other anomalies on a daily basis. 

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The  registration  services  were  migrated  from  the  main  .eu  site  to  a  mirror  site  in  less  than  three 
hours..All  functioning  .eu  websites  continued  to  be  available  and  accessible  during  the  entire  test 
period. 
A mirror site provides a copy of the main site to allow for the multiplication of the sources of the same 
information. 
A  chain  of  trust  is  established  by  validating  each  layer  of  the  hierarchy.  DNSSEC  prevents  attackers 
from  intercepting  web  traffic  and  redirecting  it  to  fake  websites  that  can  trick  people  into  supplying 
personal information. 
There  are  three  seminars  scheduled  for  May  and  June:  11  May  (Brussels),  13  May  (Athens),  6  June 
(Warsaw). 
‘Phishing’ is the acquisition of personal and financial information (user names, passwords, etc.) through 
deceptive means such as fraudulent emails or copies of legitimate websites. 
‘Warehousing’ is the practice of ‘holding’ domain names in order to resell them at a higher price. 
‘Cyber-squatting’ is registering, trafficking in or using a trademark of another in a domain name with 
bad faith, intent on profiting from  the goodwill belonging to someone else. Cyber-squatters resell the 
domain name in question to the trademark holder at an inflated price. 
‘Domainers’ is a colloquial term for domain name speculators. 
For the eligibility criteria see Article 4(2(b) of Regulation 733/2002. The Registry has a right to verify 
the  validity  of  a  registration  (Article  3  of  Regulation  874/2004).  The  registration  policy  requires  the 
registrant  to  keep  personal  data  complete  and  accurate  and  the  email  address  functioning  for 
communication  with  the  Registry,  which  reserves  the  right  to  revoke  the  domain  name  of  a  non-
functioning address. 

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Also on a daily basis, the Registry is informed of suspected or proven misconduct by private 
security organisations or by public authorities25. 

As a result, a suspicious domain name may be withdrawn. In the reporting period the number 
of suspicious domain names withdrawn decreased dramatically: from 81 in January 2010 to 2 
in January 2011 and 0 in March 201126. 

5.5. 

The profile of a .eu user 

Consumers register the .eu domain for many purposes (business, social activities, presence of 
institutions on the Internet, etc.). An analysis27 prepared by EURid on the usage of websites 
with  the  .eu  TLD  shows  that  around  36.3 %  are  business-related.  When  comparing  with  the 
main generic TLD (gTLD) strings (‘.com’, ‘.net’, ‘.org’, ‘.info’, ‘.biz’, ‘.mobi’ and ‘.pro’), the 
.eu TLD stands out in terms of usage for business purposes (27.3 %). 
However, when looking at e-commerce websites (based on the pay-per-click model28), the .eu 
TLD displays only 14.5 % of websites in contrast with the gTLDs, which range from 22 % to 
29 %. 

5.6. 

Legal proceedings and disputes concerning domain names 

5.6.1.  Cases before the General Court and the Court of Justice of the European Union 

In  the  past  two  years  the  European  courts  have  ruled  in  two  cases  concerning  .eu  usage.  In 
both cases the rulings were in line with the pleas submitted by the Commission. 

In  the  first  case  of  15  December  2009  —  Inet Hellas  T-107/06  —  the  Court  reaffirmed  the 
separation of functions between the Commission and the Registry regarding the registration of 
domain  names  under  the  .eu  TLD.  The  Court  stated  that  the  Commission's  letter  to  the 
applicant, explaining that the Commission could not act as an appeal body with regard to the 
decision  of  the  independent  .eu  Registry,  did  not  contain  any  decision  that  could  be 
challenged in the Court, and dismissed the complaint as inadmissible. 

In the second case of 3 June 2010 — Oberster Gerichtshof C-569/08 — the Court analysed 
the conditions enabling the revocation of a domain name registered on speculative or abusive 
grounds.  The  Court  ruled  that  the  list  of  ‘bad  faith’  circumstances  in  Article 21(3)  of 
the 
Commission  Regulation  (EC)  No  874/2004 
circumstances to be considered when establishing ‘bad faith’. 

is  not  exhaustive,  and  explained 

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For  example  Internet  Identity,  Arbor  Network,  MarkMonitor,  the  Federal  Computer  Crime  Unit 
(FCCU) in Belgium, the Internal Revenue Service (IRS) of the US Treasury Department. 
See the Q1 Report of EURid, available at: http://www.eurid.eu/en/about/facts-figures/reports. 
‘What is in a domain-name extension’ — a study categorising websites (June 2010). EUrid set up a test 
lab  where  evaluators  visually  assessed  a  random  sample  of  websites  found  under  each  extension.  In 
addition, statistical methods were applied to estimate the error margin and automated scanning was used 
to  verify  some  of  the  numbers.  In  total,  around  5 000  domain  names  were  assessed  for  each  of  the 
selected TLDs. For more information see: http://www.eurid.eu/files/eu_insights_2.pdf. 
Pay-per-click is a site containing mainly advertising links. 

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5.6.2.  Alternative Dispute Resolution procedure 

Any  disputes  between  the  .eu  domain  names'  holders  or  claims  against  decisions  of  the  .eu 
Registry,  can  be  submitted  to  the  Alternative  Dispute  Resolution  (ADR)  provider29  —  the 
Prague-based Arbitration Court (Czech Arbitration Court or CAC)30. 

The  ADR  procedure  applies  without  prejudice  to  any  court  proceeding.  Complaints  can  be 
submitted online in any of the 23 official languages of the EU. 

Complaints  are  mostly  initiated  against  the  .eu  domain  name  holders.  This  is  because  any 
party  may  initiate  ADR  proceedings  against  the  domain  name  holder  and  claim  that  the 
registration  is  speculative  or  abusive  under  Article  21  of  Commission  Regulation  No 
874/2004. 

During the past two years, an average of 13 cases has been filed per quarter31. In the majority 
of cases published by CAC in the period Q2 2009 to Q4 2010, the panel decided to transfer 
the  domain  name  to  the  complainant32.  On  average,  CAC  panels  take  a  decision  in  ADR 
proceedings within 4 months following receipt of the complaint. If a decision is rendered in 
favour  of  the  complainant,  the  disputed  .eu  domain  name  is  usually  transferred  to  the  latter 
within about 30 days following the panel decision, after the expiry of the right of appeal by 
the losing party. 

The fees for ADR proceedings are based on the cost recovery principle33. ADR fees, which 
originally started at € 1990, have been reduced several times since 2006 and currently start at 
€ 1 300. This is comparable with the fees charged by similar arbitration bodies, despite the fact 
the latter do not produce translations of the complaints. 

In  the  current  system,  individuals  and  small  and  medium-size  enterprises  in  the  EU  do  not 
take full advantage of the ADR mechanism given its high entry cost. An audit performed in 
June 2011, at the request of EURid, made a number of recommendations on ways to improve 
this34. One recommendation is to consider an accelerated process (‘domain name suspension 
mechanism’)  for  holders  of  prior  rights  who  want  to  act  swiftly  against  clearly  abusive 
domain name registrations, e.g. when inappropriate content or counterfeit products are offered 
via the domain name registrant’s website. This would be applicable by default to any response 
from  the  respondent.  Therefore,  the  decision  to  revoke  or  transfer  abusively  held  domain 
names could be taken without needing to convene a panel. This would reduce the costs of the 
proceedings. 

Another  recommendation  by  the  auditors  is  for  the  .eu  Registry  (EURid)  to  become 
financially involved in ADR proceedings by refunding the winning party the ADR fees. These 

29 

30 

31 

32 
33 
34 

See Article 4(2)(d) of Regulation (EC) No 733/2002 and recital 15, Articles 22 and 23 of Commission 
Regulation 874/2004. 
Memorandum of Understanding (2005) between EURid and the Czech Arbitration Court attached to the 
Economic Chamber of the Czech Republic and the Agricultural Chamber of the Czech Republic. 
In the reference period, the number of cases was as follows (per quarter): 11 in Q2 2009, 11 in Q3 2009, 
14  in  Q4  2009,  15  in  Q1  2010,  14  in  Q2  2010,  11  in  Q3  2010,  18  in  Q4  2010,  12  in  Q1  2011.  The 
number  of  ADR  cases  initiated  before  the  CAC  has  declined  significantly  since  2006  from 
approximately 200 cases per quarter to the current level. 
For more specific information see Annex 2. 
See Article 4(2)(d) of Regulation (EC) 733/2002. 
The audit is not publicly available yet. 

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recommendations are being analysed by EURid and the Commission, who will look into ways 
to improve accessibility to ADR, in particular for SMEs and individuals. 

5.6.3.  Court proceedings 

In  the  reporting  period  EURid  has  been  a  party  in  two  major  court  cases  —  Ovidio35  and 
Zheng36.  These  proceedings  concerned  the  legitimacy  of  EURid's  actions  to  combat 
warehousing and cyber-squatting practices. 

In  the  Ovidio  case,  the  Appeal  Court  in  Brussels  accepted  EURid's  plea  and  discharged  it 
from paying the penalties previously laid down in two payment orders. These had been issued 
against EURid in response to its actions to combat warehousing practices (July 2009). 

In the Zheng case, the Brussels Court of First Instance agreed with EURid about the legality 
of its actions to combat cyber-squatting practices. This judgment helps EURid in its efforts to 
fight phishing and other malicious activities37 (September 2009). 

6. 

CONCLUSIONS 

The .eu TLD model has been successfully implemented and is operating effectively. 

Over  the  past  two  years  the  .eu  TLD  strengthened  its  position  among  the  biggest  and  most 
popular  Top  Level  Domains  in  Europe  and  in  the  world.  It  remains  successful  despite  the 
continued  growth  of  the  27  national  country-code  TLDs  in  the  Member  States  and  the 
availability of generic TLDs such as .com and .org. 

By 2009 the .eu Registry had introduced IDNs under the .eu TLD to allow for the registration 
of  .eu  domain  names  at  the  second  level  in  the  Cyrillic  and  the  Greek  alphabets. 
Consequently, since 2009 the domain names registered under the .eu TLD have been available 
in all 23 official languages of the European Union (and their respective scripts). 

However, one and a half years after EURid’s application, ICANN has not yet completed the 
fast track procedure, allowing for the introduction of IDNs at the top .eu level (.ευ in Greek 
and .ею in Bulgarian). The Commission has urged ICANN to complete its examination by the 
end of 2011 at the latest. It has made it clear that the future rules establishing a ‘permanent’ 
IDN application procedure should be designed in such a way as to avoid any undue delays. 
This  is  one  of  the  public  policy  issues  that  the  Commission  will  continue  to  raise  in  the 
Governmental Advisory Committee which provides advice to ICANN. 

In  2010  the  .eu  Registry  upgraded  its  technical  systems,  fully  implementing  the  DNSSEC 
‘chain of trust’ for the domain names registered under the .eu TLD. 

The financial situation of the Registry remained stable in 2009 and 2010. 

The  ADR  system  provided  by  the  Czech  Arbitration  Court  allows  for  the  protection  of  the 
rights of registrants in all 23 EU languages. The Commission monitors the actual use of the 
system. Following recommendations by auditors, the Commission, together with EURid, will 

35 
36 
37 

Ovidio v EURID judgment, Brussels Appeal Court, 8 July 2009. 
EURID v Zheng Qingying judgment, Brussels Court of First Instance, 10 September 2009. 
For more information on phishing and similar activities see point 5.4.3 above. 

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examine  solutions  to  ensure  better  accessibility  of  the  ADR  to  individuals  and  SMEs  who 
have reasons to believe their .eu names have been improperly registered by third parties. 

In the years to come the Registry should work on strengthening and developing the perception 
of  the  .eu  TLD  among  different  target  groups,  in  order  to  expand  its  penetration  in  the 
European  domain  name  market  and  to  reinforce public awareness of the  TLD. The stability 
and  security  of  the  associated  TLD  services  must  be  ensured  in  accordance  with  the  best 
standards in the field. Given the dynamic nature of the TLD environment, the Registry should 
continue  to  maintain  and  expand  its  dialogue  and  exchanges  with  the  European  and 
international  Internet  community.  The  Commission  will  continue  to  cooperate  closely  with 
the Registry as set out in the terms of the legal framework. 

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ANNEXES 

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ANNEX 1: World's top ten TLDs at 31 December 2010 

Source: EURid’s quarterly progress report, 4th quarter 2010 

ANNEX 2: Overview of the decisions taken by the Czech Arbitration Court in .eu cases 

Decision 
Complaints Denied 
Domain Names Transferred 
Domain Names Revoked 
Settlements 
Court Decisions 
Total 

#No 

82
360
40
13
1
496

% 
16,53%
72,58%
8,06%
2,62%
0,20%
100,00%

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ANNEX 3: Total number of .eu domain names by country of registrant 

Total names (top 8 countries) in '000

Germany

Netherlands

UK

France

Poland

Italy

Czech Republic

Belgium

437

324

285

204

196

122

103

1028

0

150

300

450

600

750

900

1,050

Dec 2010 March 2009

Total names in '000

89

85

80

54

51

39

37

32

26

26

23

Austria

Spain

Sweden

Cyprus

Ireland

Hungary

Denmark

Greece

Luxembourg

Slovakia

Romania

Bulgaria

Finland

Lithuania

Estonia

Portugal

Slovenia

Malta

Latvia

17

15

14

13

13

8

7

6

0

20

40

60

80

Dec 2010 March 2009

Source: EURid’s quarterly progress reports.

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ANNEX 4: Popularity of .eu at 31 December 2010 

.eu domains/1000 inhabitants (top 8 countries)

Cyprus

Luxembourg

Netherlands

Malta

Germany

Czech Republic

Ireland

Austria

26

17

13

12

12

11

67

53

0

10

20

30

40

50

60

70

.eu/1000

.eu domains/1000 inhabitants

10

10

9

7

7

5

5

5

4

4

4

4

3

3

3

3

2

2

1

1

Estonia

Belgium

Sweden

Denmark

EU

Poland

UK

Slovakia

France

Lithuania

Slovenia

Hungary

Italy

Greece

Finland

Latvia

Bulgaria

Spain

Portugal

Romania

0

2

4

6

8

10

.eu/1000

Source: EURid’s quarterly progress report, 4th quarter 2010. 

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