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Are you a New Zealander with a .com web address? Know the legal risks

Impossible. Nuts. Unbelievable. Those are some of the more polite reactions when I tell people that having a .com domain name for their website is sufficient for them to be subject to US jurisdiction - which allows for nasty stuff like the US government seizing their website or extradition to USA to stand trial over there based on allegations alone.

The bottom line: If you have a .com domain name, or other at-risk domain names like .net, you are subject to US domestic laws and jurisdiction.

This allows the US government to seize your website or even seek your extradition to USA to stand trial, based on allegations of breaking their laws. You’re also at risk from any mistakes and collateral damage.

I was initially hesitant to raise this issue because it might sound self-serving. InternetNZ is the designated manager of the country code .nz.

Two of our subsidiary companies do the actual technical and policy bits for the .nz domain name space. But given the risks and the general lack of awareness about the issues, it’s important to know the facts.

Bodog.com
The easiest way to explain is using a recent example, Bodog.com (have a look at the website to see what a seized website looks like). Bodog is an ‘online entertainment brand’ launched by Canadian Calvin Ayre in 1994. It rapidly evolved into a high-profile online gaming and betting website.

The US government has been targeting overseas online gambling websites for many years, stepping up efforts after a federal law passed in 2006 that prohibits unlawful Internet gambling operations from accepting payments from Americans. Something like 12% of Americans go to an online casino each year so online gambling involves a lot of people and money.

On 27 February 2012 the US Attorney’s Office for the District of Maryland got approval for the seizure of Bodog’s main domain name, Bodog.com. The registry for all .com domain names is run by Verisign, headquartered in California. Even though Bodog.com was registered by a Canadian company via a Canadian registrar DomainClip, Verisign duly complied with the court order and changed the rootzone for .com to redirect the domain to the takedown page.

There are a couple of additional points about this takedown, all highlighting how ends justify the means to the US Government:

  • Bodog’s business activities are completely legal in the country where it is registered, Canada.
  • For years the Department of Justice had maintained that online gambling was illegal. In a spectacular about turn just before Christmas last year, it said that the law (the Wire Act) only applied to sports betting. They finally recognised the obvious- it takes some skill to win at poker and blackjack. So when it took action against Bodog, it wasn’t for its main activity of online gambling but the relatively smaller one of sports betting.
  • In the past, some US registrars haven’t waited for a court order to take down their customers’ websites. The sorry story of JetForm is worth noting. JotForm is in the business of helping customers create online forms that can then be embedded in their websites for easy data collection.
  • Without any warning, at the request of a single employee of the US Secret Service, American registrar GoDaddy took down its website, immediately breaking 2 million forms across the Internet.
  • Later- much later after the owner made a fuss publicly- the US Secret Service admitted it made a mistake and “launched an internal review to make sure all our policies and procedures were followed in the matter.”
  • JotForm is not an isolated incident and the US government has acknowledged more mistakes, such as the seizure of hip-hop site Dajaz1.com under the 2008 Pro IP Act and once took down 84,000 websites by mistake.

US jurisdiction
Clearly, the US Government will try and find ways to claim jurisdiction to target overseas websites that it believes to be illegal under its own domestic laws. In the case of Megaupload, it was servers located in Virginia. For Bodog, it was their .com domain name. All of this even as SOPA-type laws are in the making.

Seizing websites for alleged infringements based on having a .com name, such as Bodog, are by no means a recent phenomena. An official spokesperson for ICE (US Immigration and Customs Enforcement) says they’ve seized 750 domains in this way. Much of the recent step-up has come from Operation In Our Sites launched in June 2010. With a huge amount of money and people dedicated to addressing the ‘problem’ of overseas companies ‘stealing’ or ‘harming’ US interests, the momentum to take high-profile action is only going to increase.

Amongst all of this, democratic foundations such as due process are either ignored or subverted. The ends justify the means.

Not .com alone
The official spokesperson quoted above also said, "They [US federal agencies] have the right to seize any .com, .net and .org domain as the companies with the contracts to administer them are located on American soil, and therefore fall under U.S. laws."

So it’s not only people with .com domain names that need to think about the risks. The same applies to other domain names run by Verisign (.net, .name, .jobs, .cc, and .tv) as well as by other US-based registries, such as the Public Interest Registry that runs the .org. domain.

We estimate that about 34% of domain names registered by New Zealanders, or about 250,000 domain names, are other than .nz. The vast majority of these are .com domain names with a sprinkling of the other at-risk domain names.

TVShack.net
The US government isn’t limited to foreign rich guys like Kim Dotcom and Calvin Ayre. For example, there is a 23 year old computer science student in England, Richard O'Dwyer. He’s been charged by ICE with criminal infringement for setting up TVShack.net. This website was like a search and listing service for links to TV programs and other online entertainment material.

ICE seized the TVShack.net in June 2010 on the basis of jurisdiction over all .net domain names. The replacement TVShack.cc was also similarly shut down.

Richard O'Dwyer has been fighting extradition to the US since May 2011 and, so far, both the courts and more recently the UK government has backed US authorities.

The fact that he was merely providing links to, rather than hosting, copyright infringing material hasn’t stopped the extradition process. This is despite linking sites having been found to be perfectly legal in UK.

Commenting on the case, an official ICE spokesperson said, “The jurisdiction we have over these sites right now really is the use of the domain name registry system in the United States. That's the key... The only necessary ‘nexus to the US’ is a .com or .net web address for which Verisign acts as the official registry operator.”

ICANN up in arms?
One could reasonably expect that ICANN [the global domain name body] would be up in arms over all this messing around with the domain name system. ICANN is, after all, the global body responsible for overseeing the domain name system. Unfortunately, perhaps due to its own difficulties with the US Government, ICANN ducked the whole issue. In a blog post, CEO Rod Beckstorm merely noted that ICANN doesn’t take down domain names, ICE does. No mention of undermining the domain name system, including a risk of splitting the root so that there is no longer a single Internet.

Worse, recently ICANN’s security team went further and issued a step-by-step guide that “offers guidance for anyone who prepares an order that seeks to seize or take down domain names.”

Bottom line
To reiterate: If you have a .com domain name, or other at-risk domain names like .net, you are subject to US domestic laws and jurisdiction.

This allows the US government to seize your website or even seek your extradition to USA to stand trial, based on allegations of breaking their laws. You’re also at risk from any mistakes and collateral damage.

If these risks are acceptable, then there’s nothing to do.

If they aren’t, use domain names (registry and registrar) and servers outside US jurisdiction. That will reduce, but not entirely remove, misguided threats from the US Government to your legitimate activities online.

Finally, a note of caution to the complacent, to the people in the “I’m not doing anything wrong so why should I care” camp. When a government finds a means that works, the range of ends to which it feels justified to apply that means can expand very quickly.

Vikram Kumar is chief executive of InternetNZ, which adminsters the .co.nz domain, and advocates on behalf of internet users.

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