FTC warns domain-name expansion poses ‘significant threat to consumers’

The Federal Trade Commission in a Friday letter urged the Internet Corporation for Assigned Names and Numbers (ICANN) to rethink its plan to allow for new domain-name endings, warning that the current plan could harm consumers and hamper law enforcement.

“If ICANN fails to address these issues responsibly, the introduction of new [generic top-level domains] could pose a significant threat to consumers and undermine consumer confidence in the Internet,” the FTC wrote.

 ICANN, a nonprofit group that manages the Web’s naming system, approved a plan in June to allow for new generic top-level domain names in addition to traditional domain endings such as “.com” or “.org.” Beginning on Jan. 12, organizations can apply for new addresses ending in almost any word or phrase.

But the FTC warned that the plan could make it easier for scammers to set up fake websites to trick consumers and evade law enforcement. 

The commission explained that under the plan, “ABC Bank” could have the website “ABC.com,” but a scammer could set up “ABC.bank,” and another scammer could set up “ABC.finance.”

“Scam artists could easily take advantage of this potential for confusion to defraud consumers,” the FTC wrote.

The commission also noted that it struggles to find out who is really behind many domain-name registrations. FTC officials have discovered websites registered to “God,” “Bill Clinton” and “Mickey Mouse.”

The FTC urged ICANN to implement the plan first as a pilot program and restrict the number of new top-level domains.

The commission said ICANN should beef up its compliance staff and develop a program to monitor consumer issues. They said the group should improve the accuracy of registration data and impose a registrant verification requirement.

ICANN argued that its plan will increase innovation and competition on the Internet and create new options for consumers.

Kurt Pritz, a senior vice president at ICANN, told lawmakers this week that the group will only grant new top-level domains “that meet stringent technical and financial criteria.” 

He said allowing for any new top-level domain that meets the strict criteria will prevent ICANN from having to pick winners and losers.

ICANN is an independent, international nonprofit, and it is unclear what the U.S. government can do to stop the rollout of new domain names.

---