Internet touts have used a legal loophole to buy thousands of Europe's new internet addresses, thwarting attempts to crack down on cybersquatters and unscrupulous traders.
The new addresses, ending in .eu, went on sale yesterday after years of planning by European policymakers. For the past decade websites have used suffixes such as .com and .co.uk, but organisers said a continental equivalent could prove pivotal for the European internet industry.
It quickly emerged, however, that some traders have been using a loophole in trademark law to claim ownership of generic words such as "fashion" and "football", or names such as "Africa" and "Glasgow". The result is that many of the most valuable domains went to private dealers before the public sale started.
The "sunrise" procedure was implemented by Eurid, the non-profit group overseeing the sale, as a way of preventing cybersquatters from buying up websites such as CocaCola.eu or McDonalds.eu and then ransoming them for large sums of money. Under the plan, existing trademark owners were given four months to apply for their name before domains were opened up to the public.
But thanks to a confusing clash of trademark laws across Europe, some dealers were able to claim ownership of words such as "green" and "student" and buy them privately. In Belgium, the Netherlands and Luxembourg, trademarks can be registered for as little as €164 (£114) and approved within 24 hours. Dealers are then able to sell the domain on the open market, often for more than £10,000.
"It's a complicated situation," said Markus Eggensperger, the legal and public relations director for internet company Lycos. "The speculators were very tricky, but the regulations allowed it. It isn't an ideal world, but to make it fairer would have taken even more bureaucracy."
Selling domain names has become a huge business over the past decade. This year sex.com was sold for $14m (£8m), making it the most expensive domain in the world. European touts have been clamouring to try to repeat the goldrush, with 281 separate applicants all claiming they own the rights to the sex.eu name. More than 320,000 domains were allocated during the sunrise period, but many were put straight up for auction. One brokerage site claimed it had more than 3,000 .eu domains up for sale before yesterday's launch.
Eurid officials said they could not block the loophole. The sunrise period had been intended to give people who had a protected name time to register it, said a spokesman, Patrick Linden. "If someone has registered that trademark in any country and for any purpose, then they could apply. Not accepting that would have been to override the law of 25 countries."