Select Committee on European Scrutiny Sixth Report


COM(00) 827

Draft Regulation on the implementation of the Internet Top Level Domain ".eu".

Legal base: Article 156 EC; co-decision; qualified majority voting (but see paragraph 7.10 below)
Document originated: 12 December 2000
Forwarded to the Council: 14 December 2000
Deposited in Parliament: 17 January 2001
Department: Trade and Industry
Basis of consideration: EM of 31 January 2001
Previous Committee Report: None
To be discussed in Council: 5-6 April 2001
Committee's assessment: Politically important
Committee's decision: Not cleared; further information requested


  7.1  On 15 November 2000, we cleared a Communication[18] in which the Commission reported on responses to its consultation on the creation of an Internet Top Level Domain (TLD) name. The .eu TLD proposed would be additional to, rather than a replacement for, existing country code level TLDs, such as .uk. A very large majority of the 90 responses were strongly in favour. Following agreement in principle from the Internet Corporation for Assigned Names and Numbers (ICANN) that it will delegate .eu, the Commission decided that, rather than issue another Communication as promised, it should go ahead with bringing forward this draft Regulation.

The Commission proposal

  7.2  The draft Regulation formally charges the Commission with the implementation of the .eu Top Level Domain, sets out the rules and procedures, including the designation of a Registry, and establishes the public policy framework within which the Registry will function. The Registry is the entity that is entrusted with the organisation, administration and management of the TLD.

  7.3  The main provisions of the Regulation can be summarised as follows:

— Article 2

  7.4  This sets out the characteristics of the proposed .eu Registry, establishing that:

—  the Registry will be the body responsible for organisation, management and administration of the .eu TLD;

—  the Commission will appoint the Registry under a fixed-period contract, supervised by the Commission;

—  the Registry shall be a not-for-profit organisation; and

—  the Registry shall contract with ICANN, with the prior consent of the Commission.

— Article 3

  7.5  This sets out the obligations of the Registry. It shall:

—  observe the provisions of this Regulation;

—  establish the basic principles under which the Registry will operate, namely those of quality, reliability, accessibility, transparency and non-discrimination;

—  register domain names under .eu requested by any undertakings based, registered or established in the Community and natural persons resident in the Community;

—  ensure fees are affordable and based on costs; and

—  be subject to the jurisdiction of the Member State in which it is based.

— Article 4

  7.6  This Article sets out the public policy framework. It provides that the Commission shall adopt public policy rules, after consulting the Registry. These should include:

—  measures to prevent speculative and abusive registrations ("cybersquatting") in accordance with the recommendations of the World Intellectual Property Organisation (WIPO); and

—  dispute resolution procedures which conform to best practices, including those of WIPO.

— Article 6

  7.7  This reserves for the Community the rights to .eu, including, in particular, intellectual property rights and other rights to the Registry databases.

The Financial Statement

  7.8  The Financial Statement seeks to quantify the appropriations which the Commission estimate will be necessary to ensure that they can maintain control over, and develop policy for, the Registry. The Registry itself is intended to be self-funding from revenue from .eu Domain registrations. The statement provides for a report to be drawn up after three years to evaluate the operation of the .eu TLD, including cost-effectiveness to users and the degree of user satisfaction. Based on this report, a proposal will be made to continue, modify or discontinue the Domain.

The Government's view

  7.9  The Minister for Small Business and E-Commerce at the Department of Trade and Industry (Ms Patricia Hewitt) says that the Government welcomes the proposal and believes that .eu will develop as a useful addition, and alternative, to the national TLDs. She says:

"The .eu TLD offers the potential for traders, especially SMEs, to project themselves across borders, at the same time as indicating a European identity and legal base. For these reasons, the Heads of Government agreed at the Lisbon European Council that the creation of .eu should figure among measures to accelerate e-commerce listed in the eEurope Action Plan 2002.

"The UK is pressing for a liberal Registry policy that will allow .eu to be used not only by enterprises and individuals based within the EU, as is the case in this draft Regulation, but also by enterprises and individuals based in EEA, EFTA and Applicant States. This could give rise to real benefits for both the EU and those from elsewhere in Europe in helping to develop the Single Market, in combating the digital divide with the Applicant States, and helping them to become competitive and adapt to market pressures, as they prepare for accession to the EU. The Commission's proposals regarding the public policy and management issues (e.g. copyright, competition, public procurement, jurisdiction, finance, and supervision) are likely to be satisfactory for the UK, subject to further discussions of the details in Council fora".

Legal base

  7.10  The Minister says that a number of Member States, including the UK in Working Group discussions, have queried whether Article 156 of the Treaty is the most appropriate Article for this proposal. The Commission has agreed to reconsider.


  7.11  The Minister tells us that an amended proposal is expected to be adopted at the Telecoms Council on 5-6 April. She does not tell us what support the Government expects from other Member States for its ambition for a liberal Registry policy that will allow the new Top Level Domain to be used by enterprises and individuals based in the European Economic Area, European Free Trade Area and applicant States. We ask her to write to us in time for us to consider her letter at our meeting on 14 March, with her view of the proposal in the form in which she expects it to be adopted, and with information on any resolution of the controversy over its legal base. We assume that the text will still be unofficial, but the Minister should point to those sections of the text which are still subject to negotiation and indicate the outcomes the Government expects.

  7.12  Meanwhile, we shall not clear this document.

18  (21447) 10204/00; see HC 23-xxix (1999-2000), paragraph 29 (15 November 2000). Back

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