COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on the implementation and functioning of the .eu Top Level Domain name and repealing Regulation (EC) No 733/2002 and Commission Regulation (EC) No 874/2004
Date: 2018-04-27
Institutions: Directorate-General for Communications Networks, Content and Technology, European Commission
Subjects: European symbol, Internet address, digital single market, regulation of telecommunications, technical specification

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   EUROPEAN COMMISSION  Brussels, 27.4.2018  SWD(2018) 121 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on the implementation and functioning of the .eu Top Level Domain name and repealing Regulation (EC) No 733/2002 and Commission Regulation (EC) No 874/2004 {COM(2018) 231 final} - {SEC(2018) 205 final} - {SWD(2018) 120 final} - {SWD(2018) 122 final}  
 
 
Impact  assessment  on  the  REFIT  Review  of  Regulation  EC  733/2002  establishing  the  .eu  top-level  domain  (TLD)  and 
Regulation EC 874/2004 laying down public policy rules concerning the implementation and functions of the .eu TLD. 

Executive Summary Sheet 

A. Need for action 

Why? What is the problem being addressed?  
The domain name system (DNS) market and political context have evolved since the entry into force of the .eu Regulations. 
While the legal framework has been subject to minor amendments, the .eu Regulations have never been fully reviewed to 
ensure that they still serve their intended goal without cumbersome administrative or implementation costs and that they still 
effectively deliver their intended benefits of supporting online cross-border activities and promoting EU identity online. The 
evaluation shows that the current regulatory framework does not sufficiently support the stability and sustainability of the 
.eu TLD and does not fully exploit its potential within the EU Digital Single Market. The following interrelated problems 
have  been  identified:  outdated  and  rigid  legislation;  deficiencies  in  governance  and  accountability;  rapid  changes  to  the 
market. 

What is this initiative expected to achieve?  
This initiative is expected to ensure the stability and sustainability of the .eu TLD, so as to better enable it to achieve its 
goals  of  encouraging  online  cross-border  activities  in  Europe  and  of  enabling  an  online  European  identity.  The  specific 
policy objectives (SO) are the following: (SO1) Remove outdated legal/administrative requirements; (SO2) Ensure the rules 
are future-proof and allow the .eu domain to adapt to rapid changes in the TLD market and the dynamic digital landscape 
while enabling the use of the .eu TLD to promote EU priorities in the on line world; (SO3) Ensure a governance structure 
that both reflects technical and governance best practices and serves EU public interest; (SO4) Promote the attractiveness of 
.eu. 

What is the value added of action at the EU level?  

The  .eu  TLD  has,  by  definition,  a  cross-border  dimension.  It  is  the  TLD  of  the  European  Union  and  a  symbol  of  the 
European  online  identity.  The  existence  of  a  specific  domain  name  for  the  European  Union  under  a  very  clear  and 
identifiable common label is an important and valuable building block for European online identity. 
Regulatory  action  taken  at  Member  States  level  would  not  achieve  the  fundamental  objectives  behind  the  creation  and 
management of a trusted and innovative namespace for the EU. The .eu TLD was set up as a country code TLD (ccTLD), 
rather than as a generic TLD (.com, .berlin). Public policy responsibility for the .eu TLD rests with the European Union. 

B. Solutions 

What legislative and non-legislative policy options have been considered? Is there a preferred choice or not? Why?  
This impact assessment (IA) explores a series of policy options which are mainly, but not exclusively, extrapolated from 
problem drivers relating to the "outdated and rigid legislation" and "governance mechanisms". Two separate cross-cutting 
issues, which aim to address the issues emerging from the rapid changes to the market", are taken into account horizontally. 

OPTION 0: BASELINE SCENARIO: Maintenance of the current regulatory framework for the .eu. 
OPTION  1:  COMMERCIALISATION:  Simplifying  the  regulatory  framework  while  outsourcing  the  operation  and 
management of the Registry to an external for-profit service provider.  
OPTION  2:  MODERNISING  THE  LEGAL  FRAMEWORK:  Replacing  the  current  legal  framework  with  one  principle-
based legal instrument.  An external management system for the .eu TLD, based on a contract, would be maintained.  
OPTION 3: SEPARATE GOVERNANCE: Combines option 2 with the creation of a multistakeholder body which would 
have an advisory role. This body would be independent from the .eu Registry. 
OPTION 4: INSTITUTIONALISATION: Management and operation of the Registry within a department of the European 
Commission (a) or an EU Agency (b1: EUIPO, b2: ENISA) 

Options 1, Option 4(.a) and Option 4(b2) were discarded at an early stage as they do not meet the policy objectives. 

In relation to the two cross-cutting issues dealt with separately, the IA analyses both the possibility of  the .eu Registry to 
offer direct registration to registrants given changes in market conditions, and possible changes to the eligibility criteria for 
obtaining a .eu TLD. 

Preferred option: OPTION 3, together with the lifting of strict requirements in relation to direct registration, a citizenship 

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criterion for natural persons and a residency criterion for organisation/ companies. 

Who supports which option?  
The vast majority of consulted stakeholders who took part in the consultations welcome the preferred option as they favour 
a  simplification  of  the  legal  framework,  while  slightly  relaxing  the  current  eligibility  criteria.  Views  on  the  governance 
model were more varied. 

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise main ones)?  
Under  the  preferred  option,  a  streamlined,  principles-based  legal  framework  would  be  created.  This  would  provide  the 
necessary flexibility for the .eu TLD to adapt to rapidly changing technical improvements to the DNS, including in terms of 
security features. End users would be able to enjoy the benefits of technical improvements without being disadvantaged by 
the time it takes to amend the Regulations. The preferred option would also improve the functioning of the .eu TLD and 
foster  innovation  in  the  .eu  ecosystem,  both  at  the  level  of  the  Registry and  in  the  downstream  markets  of  registrars  and 
registrants, therefore providing an improved product to the benefit of European citizens and businesses. 
The .eu TLD would be more attractive in the TLD market, increasing competition between registrars. This, in turn, would 
be expected to a) potentially reduce prices for for end users, b) ensure greater availability of the .eu domain and its benefits 
to EU society, c) increase registrations and move away from a scenario in which the renewal rate falls below the threshold 
that would threaten the financial sustainability of the domain name.    
This option entails a change in governance structure, with a separate body advising on strategic decisions with respect to the 
functioning of the .eu TLD and oversight over the registry. These changes, by strengthening and widening the input into the 
good governance of the .eu Registry, are expected to support increased transparency and accountability and to effectively 
mitigate potential risks of mismanagement in the operation of the .eu TLD. 
Moreover, the introduction of the citizenship criteria would allow EU citizens living in 3rd countries to also benefit from the 
advantages brought by the .eu TLD, while lifting strict requirements in relation to direct registration, will be beneficial in 
terms of a better promotion of the .eu TLD, for instance in scripts other than Latin. 

What are the costs of the preferred option (if any, otherwise main ones)?  
Compliance  costs  for  the  registry  are  expected  to  be  reduced  under  the  preferred  option.  However,  even  if  the  legal 
framework  is  less  burdensome,  there  will  still  be  a  need  to  properly  organise,  administer  and  manage  the  .eu  TLD. 
Nevertheless some of the governance costs for the Registry would be removed. Currently governance costs are budgeted for 
under general costs and are estimated at €296.000 for 2018.  

On the European Commission side, the work involved in overseeing the .eu TLD would be reduced thanks to a) the newly 
created body that is expected to cover some of the tasks that the Commission currently carries out, and b) a lighter and more 
future-proof legal framework that is able to adapt to market changes without costly amendments to legislative procedures. 
The multi-stakeholder body needs to be resourced appropriately. It will be supported financially by the Commission. 

End users and registrars are not expected to be affected (in terms of the price they pay for a .eu TLD). 

How will businesses, SMEs and micro-enterprises be affected? 
The  preferred  option  would  have  a  positive  impact  on  European  businesses,  SMEs  and  micro-enterprises  by  increasing 
product innovation, reducing prices and providing greater visibility and availability of the .eu TLD. 

Will there be significant impacts on national budgets and administrations?  
None are expected. 

Will there be other significant impacts?  
The initiative can be expected to have a positive impact on the Registry and in the  downstream markets of registrars and 
registrants,  including  businesses  and  citizens,  by  allowing  more  flexibility  and  innovation,  reducing  prices  and  providing 
greater availability of the .eu TLD. 

D. Follow up 

When will the policy be reviewed?  
Under  the  preferred  option,  the  new  legal  framework  would  allow  the  required  flexibility  to  cope  with  market  changes 
without the need for legislative reviews. It would thus create a future-proof legal framework.  
Nevertheless, the Commission will monitor the application of the new legal framework and submit a report setting out the 
results of its evaluation to the European Parliament and the Council no later than five years after the date of application of 
the new framework. 

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