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DOMAIN NAME REGISTRATION COMPANY SETTLES FTC CHARGES
Network Solutions, Inc. settled FTC charges that "its deceptive marketing practices unlawfully tricked consumers into transferring their
Internet domain name registrations to the company." The settlement permanently bars Network Solutions from misrepresenting that a consumer's domain name is about to expire or that the transfer of a domain name is actually a renewal. The order also requires Network
Solutions, Inc. to pay consumer redress under the terms of a previously settled class action lawsuit.
Network Solutions is the largest of more than 100 companies that
compete to provide domain name registration services to consumers.
These companies, called "registrars," help consumers establish the
addresses for their Internet websites. Consumers choose a
second-level domain name for generic top-level domain names such as
.com, .net., and .org (e.g. www.networksolutions.com) and Network
Solutions registers that domain name with the appropriate "registry."
FTC's complaint alleged that, as part of its marketing campaign,
Network Solutions mailed solicitation notices to consumers that
appeared to be expiration notices from the consumers' current
registrars. The notices allegedly said that consumers' domain names
were about to expire, and that Network Solutions was offering to
"renew" their domain names for a fee.
FTC alleges that these notices were deceptive for two reasons:
(1) The notices claimed that the consumers' domain names would soon
expire, but didn't disclose the actual expiration dates of the
consumers' domain names--which were, in some cases, months or years
in the future.
(2) The notices offered to "renew" the consumers' domain names
without disclosing either the identity of the consumers' then-current
registrars or that accepting the offer would cause the domain name to
be transferred to Network Solutions.
FTC charges that the notices tricked some consumers into transferring
their domain name registrations to Network Solutions--often at a
significantly higher price.
The stipulated order permanently bars defendant from misrepresenting
that:
a consumer's domain name registration is about to expire;
the expiration date of a registration is near or on the date by which
a consumer must respond to the Network Solutions solicitation; and
the transfer of a domain name registration is only a renewal.
The settlement also requires defendant to state clearly and
conspicuously in any written or oral communication with consumers the
date on which the consumer's registration will expire. The order also
requires Network Solutions to pay consumer redress in accordance with
a class action lawsuit it recently settled.
At the time that the solicitations that are the subject of FTC's
charges were mailed, the company was doing business under the name
"VeriSign."
FTC's vote authorizing staff to file the stipulated final order was
4-0-1, with Commissioner Pamela Jones Harbour not participating. The
order was filed in the U.S. District Court for the District of
Columbia on September 11, 2003, and was entered by Judge Ricardo M.
Urbino on September 12.
NOTE: This stipulated judgment and order is for settlement purposes
only and does not constitute an admission by the defendant of a law
violation. Stipulated judgments and orders have the force of law when
signed by the judge.
(FTC v. Network Solutions, Inc., doing business as VeriSign Registrar
(Civil Action No.: 03 1907) U.S. District Court for the District of
Columbia Stipulated Final Order for Permanent Injunction, FTC File
No. 0223231, September 24, 2003.)
FDA WARNS WEBSITE ABOUT MARKETING "UNAPPROVED AND POTENTIALLY RISKY DRUGS FROM CANADA"
On September 16, 2003, the Food and Drug Administration (FDA) issued a warning letter to CanaRx Services,
Inc., notifying the firm that FDA "considers its operations to be
illegal and a risk to public health." FDA's warning letter says that
CanaRx runs an Internet website and mail operation that illegally
causes the shipment of prescription drugs from a Canadian pharmacy
into the U.S., subjecting Americans to risky imported drug products
and making misleading assurances to consumers about the safety of its
drugs.
"Firms like this should not continue to profit through illegal
actions that put the health of the American public at risk." So said
Mark B. McClellan, M.D., Commissioner of Food and Drugs.
FDA's concern: medications bought by U.S. consumers from foreign,
unregulated drug outlets pose a growing potential danger. According
to FDA, CanaRx Services and similar companies often state incorrectly
to consumers that their prescriptions are "FDA approved" or use
similar language, which could lead consumers to conclude mistakenly
that the prescription drugs sold by the companies have the same
assurance of safety and effectiveness as drugs actually regulated by
FDA.
FDA is working closely with partners in the individual states in
support of their efforts to curtail illegal and potentially dangerous
operations, especially when they involve misleading claims about drug
safety.
FDA noted that while many legitimate Internet pharmacies provide safe
and possibly more convenient access to prescription services, foreign
Internet pharmacies selling to the U.S. operate outside the law.
CanaRx has 15 working days to respond to FDA's warning letter. FDA
will "take appropriate action, including collaborative actions with
individual states and foreign governments, to stop similar illegal
activities by this or other similar firms."
(FDA News P03-71, September 16, 2003.)
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