UK domain name company Anet has launched an internal investigation into its selling techniques following complaints from outraged Network News readers.
Readers accused Anet of unscrupulous selling techniques after it tried to lure UK companies into buying overpriced domain names that they didn't need. While few agreed to pay the inflated prices, the scheme was effective to the extent that the majority of readers paid to get the names registered elsewhere.
UK domain name regulator Nominet wrote to Anet, pointing out that pressure-selling would result in exclusion from Nominet membership. Anet then told Nominet it had launched an internal investigation.
Nominet stated it would verify the company's change of heart by monitoring complaints to its customer support desk. "We are keeping an eye on it," a spokeswoman said.
But the debacle has exposed the toothless nature of UK internet watchdogs, especially when compared with their US counterparts. Although the Office of Fair Trading confirmed it is looking into the situation, it cannot impose fines.
"We can only fine under competition regulation, but Anet would not fall under this legislation," an OFT spokeswoman said. However, she emphasised it could ensure a company does not use the practice in the future.
By contrast, interventions by US watchdogs appear quite effective. Last week, an investigation by the Federal Trade Commission into selling practices by Canadian company National Domain Name Registry led to a £256,000 fine.
This means that defendant NDNR must pay back all £239,000 collected in the scheme, as well as the investigation's administration costs. It is now banned from making false statements when selling domain names and has agreed to tape all its telemarketing calls.
Meanwhile, Network News readers said they are no longer "fooled" by similar practices from other firms, including those reported by domain name company Delta Host.
Anet refused to comment.
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