Financian Industry Tech: Financial institutions demand brands in new TLDs

A top-level domain is the bit after the dot in an internet address e.g. .com, .net, etc.

In recent years, there has been a rapid growth in top level domains, first by countries (e.g. .to for Tobago has generated a huge interest),

Next came the raft of non-geographical issues such as .info (popular amongst internet fraudsters as well as legitimate businesses).

And after that came the use of domain names in non-Roman characters, opening the way for e.g. Chinese, Cyrillic and Arabic script.

Now the latest raft of TLD domains is being released after a six-year process. Some think it's a great idea, some think it's an opportunity (for fraud and cybersquatting) and some think it's a disaster waiting to happen.

The reason is simple: under the new scheme, any word or selection of alpha-numeric characters can be used as a top level domain.

With each new release, there is an increasing risk of abuse of a brand - and competition. Apple doesn't want Apple Records or a little orchard owner getting the .apple domain. So, even though it's a word in everyday use, Apple wants to control its on-line identity by making sure it gets control of that TLD. But, obviously, while it wants to do that, it has no obvious right to exclusive use of that word. And so it has to get itself into pole position to scoop it up.

It's different with HSBC. There is no justification for anyone to hold .hsbc except the banking group. But there is no mechanism to link trademarks with domain names (the publisher of this newspaper struggled for some five years to recover the domain name WorldMoneyLaunderingReport.Com which had been registered by a third party - even the registrar did not help despite clear evidence that the domain name was not in any way connected with the publication of that name).

Domain registrars are notoriously incomtepent - or uncaring - when it comes to protecting brands. Phishing frauds are often carried out using a landing page at a fraudulently created web-site with a name that is, obviously, intended to appear to be the name that the user thinks he is seeing.

There is little or no mechanism for these domains to be suspended even when fraud is reported to the registrar, an area over which there is currently heated debate in the UK where the TLD registrar has said it is considering adopting powers to suspend or shut down sites that it can see are e.g. selling counterfeit products or are being used for fraud. Some in the industry say that should not happen without a court order.

The new TLDs are creating a "gold-rush".

Strongest interest has come from businesses in the Asia Pacific region (52%), followed by the United States (29%), Europe (10%), Middle East (7%) and Africa (2%), says ARI .

"The first round of new domains will be dominated by technology brands (20%), as the IT industry recognises the huge opportunity to innovate. This will be closely followed by banks and other financial service providers (11%) who are jumping at the opportunity for the increased online security and trust that comes with a .brand domain," Adrian Kinderis, CEO of ARI says.

But his words carry an implied threat. Any company that does not jump on the opportunity to get its ".brand" address risks losing control of it to a cybersquatter or fraudster. In short, being a brand name or other intellectual property owner is no use in the world of internet domains.

So far, it appears that no companies have tried to take the step of injuncting the issue of their brand to any third party. It's a heavy-handed threat and it's cheaper to take control of the domain.

But at the end of the day, the proliferation of TLDs is merely putting money in the pockets of registrars as companies scramble to protect their brands.

The new-style TLDs will first hit the 'net for business in 2013 but companies are already scrambling to contain their risks.