EURid is suing the 400 companies that registered the names — most based in the United States — for breach of contract in the Belgian courts, saying the syndicate had systematically acquired domain names via three British firms with the obvious intent of selling them.
The launch of the ".eu" domain name in April saw a rush of registrations from European businesses and individuals, with nearly 2 million European Web addresses now active.
Registrars such as Internet service providers or Web-hosting firms can apply for a domain name on behalf of an existing client. But the contract with EURid forbids them from buying and holding onto domain names for resale - known as warehousing.
"We want .eu to be a fair top-level domain name available to everyone who is eligible," said EURid spokesman Patrik Linden.
The nonprofit Internet name authority suspects that three British companies — Ovidio Ltd., Fausto Ltd. and Gabino Ltd. — are acting as a front for a number of registrars.
Web sites for the three carry an identical disclaimer, saying they own a portfolio of domain names and seek to avoid registering names where third parties have conflicting prior rights. The Web sites do not list any address, phone number or e-mail addresses.
Linden said EURid had swung into action after it received a few complaints and became suspicious about some registrations that could not prove that the holder was based within the European Union.
"When the system is abused, there is a risk that the perceived value of .eu will decrease," EURid said in a statement.
Internet sites using any of the 74,000 domain names will still be open for traffic, Linden said, but EURid will not allow the names to be sold. It will ask a Belgian court in October to return the names, which would then be open again for registration to eligible applicants.
Until April, Europeans had to choose between a national domain such as ".fr" for France or a general one like ".com," which is often seen as American.