What Is Domain Squatting?

22nd August, 2016 by

It’s actually against online law to take a domain name hostage…

Cyber criminals’ creativity knows no bounds; they are constantly devising ways to trick people out of their money. Whether it be a long-lost great-grandfather in Nigeria who has left you an inheritance of a number at least 7 digits long, or a complex hacking scheme where the credit card information of tens of thousands of customers is stolen, the complexity of online scams has increased many times over. Though they are devious, dastardly and deceitful, cyber criminals are nothing if not deft. One of the ways they digitally pilfer is domain squatting, the topic we are taking a look at today.

What is domain squatting?

Put very simply, domain squatting – also known as cyber squatting – is holding a domain name hostage. Cyber criminals will register a domain name that is either an exact match of or very closely resembles a registered trademark. This is usually a business name, but could also be a person’s name or a company motto. They will then demand large sums of money from the company before they release the domain, otherwise they threaten to defile the brand or person’s reputation.

Another prevalent form of domain squatting is to register a social media account that poses as a particular person, and then defame that person via the account. For instance, if I wanted to domain squat Madeleine Bruce, content marketing manager at UK2, I could open up a Twitter account called @therealmadeleinebruce, gain lots of followers, and then post status updates like, “I think puppies are dumb.” Uproar from the masses would ensue, Ms Bruce would want the chaos to stop, and thus she would (hopefully) pay me my ransom..

With all due respect to Ms Bruce, however, cyber criminals are wont to go for more prominent targets with bigger potential payouts. The BBC won a court case against a US company called Data Art Corporation that was domain squatting, when it registered bbcnews.com. The squatters had no intention of telling today’s top stories, either – it linked to gambling and soft porn sites.

Back in the beginning of the internet age when these crimes first started happening, one of the issues with catching the bad guys was governance. These violations would often occur across international borders, so countries had to mitigate the jurisdiction of domain squatters.

This problem was solved by the Internet Corporation of Assigned Names and Numbers, more commonly known as ICANN. ICANN developed an arbitration system that now allows the rightful owner to a trademark to file a complaint against a squatter. ICANN outlines three violations which must take place in order for the arbitration to take place:

  1. Domain names cannot be identical or confusingly similar to a trademark or service mark in which the complainant has rights
  2. Domains cannot be registered to persons who have no rights or legitimate interests in respect of the domain name.
  3. Domains cannot be registered and be used in bad faith.

The Uniform Domain Name Dispute Resolution Policy, as it is formally called, allows the trademark owners to go after the squatters, although it does not permit any money to be awarded if the squatters are found to be in the wrong.

Some countries have different laws that go beyond the scope of the UDRP to further prosecute domain squatting. The US has the U.S. Anticybersquatting Consumer Protection Act (ACPA), which says complainants must prove the following in order to win a case:

  1. The domain name registrant had a bad-faith intent to profit from the trademark
  2. The trademark was distinctive at the time the domain name was first registered
  3. The domain name is identical or confusingly similar to the trademark, and
  4. The trademark qualifies for protection under federal trademark laws — that is, the trademark is distinctive and its owner was the first to use the trademark in commerce.

Under the ACPA, financial damages can be awarded.

Though they will undoubtedly use their ingenuity to develop more ways to pillage the digital world, cyber criminals will face a roadblock with domain squatting. What will they think of next? Check back regularly with the UK2 Blog to find out.

Buy your domain names from UK2 over on our domain name registration page.

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