$A250 000 compensation for internet domain name consumers after international Co-Operative action

Consumers from around the world will benefit from agreement by an Australian Internet domain name registration company to pay $A250 000 into a compensation trust fund, Australian Competition and Consumer Commission Chairman, Professor Allan Fels, announced today.

The fund's establishment follows action by the ACCC, in conjunction with the US Federal Trade Commission, against the company for misleading and deceptive conduct.

In the Federal Court, Justice Lindgren has accepted undertakings from Internic Technology Pty Ltd and its director, Mr Peter Zmijewski, to conclude legal proceedings brought by the ACCC for alleged misleading and deceptive conduct.

The matter was raised with the ACCC by the US Federal Trade Commission, which had received complaints from the United States, because Internic Technology and Mr Zmijewski reside in Australia.

"This settlement indicates the increased cooperation achieved by the ACCC in international competition and consumer law enforcement," Professor Fels said. "With the recent signing of an agreement between the United States and Australia to allow the two countries' anti-trust organisations to assist each other, I expect more such similar cooperative actions to follow".

"In this case, the ACCC had alleged that Internic and its director misled consumers by using an almost identical domain name to the exclusive registrar of second level domain names in the .com, .net, .org, .gov, .edu top level Internet domains (the InterNIC) and by operating a website at http://www.internic.com.

"The InterNIC is a facility operated by Network Solutions Inc., on contract with the United States government, and can be found at http://www.internic.net.

"The ACCC alleged that: consumers looking for the InterNIC often enter "internic" or "internic.com" into their web browser and end up at the site operated by the respondents where the respondent acts as a broker in the sale of domain name registration services; the use of the name 'internic.com' is likely to create the false impression that the respondent's business is, or is affiliated with, the InterNIC; consumers went to the respondent's website to register a domain name directly with InterNIC; and consumers have used the respondents services believing they were using services provided by InterNIC as a result of the respondent's misleading and deceptive conduct.

"The fee charged by the respondents was between $US220 and $US250. The fee charged by InterNIC has ranged between $US70 and $US100.

"The respondents have registered about 13,000 domain names prior to May 1998. These domain names have been registered to consumers from all over the world including Australia, the US, Canada, France, Norway, Spain, the United Kingdom; Switzerland and Germany".

Internic Technology and Mr Zmijewski gave undertakings to the Court that they will no longer use the name "internic" or any similar name.

They also agreed to place $A250 000 in an Australian trust fund to be used to refund consumers who were misled by the conduct. All consumers who registered a domain name at the internic.com site prior to May 1998 throughout the world will be emailed a notice, setting out the procedural requirements for claiming a refund.

The monies in the trust fund will be distributed between all consumers making a claim.

Any remaining funds are to be used by the ACCC for the purposes of educating Internet users and providers of Internet services about the obligations of people using the Internet in making representations in the course of trade or commerce.