Internet Registrars Accused Of Supporting Online Criminals

Even as ICANN CEO Rod Beckstrom on Monday called for greater international cooperation to secure the Internet's Domain Name System, a report issued by an independent security research group claims that ICANN-accredited Internet Registrars are violating their contracts with ICANN to support online criminals.

The Internet Corporation for Assigned Numbers and Names accredits Internet Registrars under specific contractual terms. Accredited Registrars in turn may sell domain names to companies and individuals.

The report published on Monday by KnujOn, which identifies itself as an independent Internet policy and security research group located in Boston and Vermont, claims that 162 of Internet Registrars may be violating their agreements with ICANN and that 80 of them are blocking access to WHOIS data about their customers.

The report singles out eNom, one of the largest sellers of Web addresses, for knowingly facilitating traffic in illegal pharmaceuticals online.

Online pharmacies have long been a source of contention and risk because so many of them are unlicensed. In 2007, the FDA warned that "a number of Americans who placed orders for specific drug products over the Internet (Ambien, Xanax, Lexapro, and Ativan), instead received a product that, according to preliminary analysis, contains haloperidol, a powerful anti-psychotic drug."

Earlier this month, the FDA warned that H1N1 flu virus-related products sold through an online Web site were not approved flu medicines.

Last summer, trademark monitoring firm MarkMonitor estimated that online pharmacies had generated $11 billion in sales in 2009, up from an estimated $4 billion in 2007.

The growing trade in online pharmaceuticals is made possible by Internet Registrars, which provide back-end services that allow online pharmacies to operate, the report says. Yet, Internet Registrars such as eNom have been slow to take action against Web sites that prompt complaints, the report claims.

"Whether actively or ignorantly involved, there is no question that eNom has become an arm of illicit international drug traffic, a resource modern organized crime cannot exist without," the report states.

Demand Media, the parent company of eNom, disputes the report's claim that it fails to act against Web sites that violate the law.

"eNom is the largest domain name wholesaler and we take this responsibility very seriously," said Demand Media SVP of corporate communications Quinn Daly in an e-mail. "We cooperate with multiple law enforcement agencies, as this is our policy and meets ICANN requirements. Customers suspected of using eNom products and services for illegal purposes are investigated and appropriate action is taken."

Daly, who referred to KnujOn as "an individual whose research has been called into question in the past," confirmed that eNom had received a complaint from KnujOn and LegitScript, a pharmacy trade organization, and that the complaint is being reviewed.

KnujOn identifies Garth Bruen and Robert Bruen as principals in the organization. The group publishing its report in conjunction with the start of ICANN's 38th international meeting in Brussels, Belgium in the hope of encouraging ICANN to tighten its rules for dealing with Internet Registrars and online pharmacies.