GmbH: Exclusiveness Increases Value

The new gTLDs for limited companies, like .gmbh for German limited companies, offer SMEs a new way of identifying themselves in their online presence. dotmagazine talked to Marco Hoffmann from InterNetX about why a .gmbh domain name can be a trust-building boon for companies wanting to business in the German market.

DOTMAGAZINE: Who is eligible to register a .GMBH domain and why are there restrictions?

MARCO HOFFMANN: Domains with the extension .GMBH are reserved for companies operating as “Gesellschaft mit beschränkter Haftung” (limited liability companies). This opens up new and attractive possibilities for about 1.2 million GmbHs in Germany, Liechtenstein, Austria and Switzerland to present their businesses on the World Wide Web in the best way possible.

Registrants of .GMBH domains have to prove that they indeed are a GmbH, for example by providing an excerpt from the commercial register. This brings advantages for Internet users and companies alike. Companies benefit from the chance to present themselves under a unique seal of quality. For Internet users, the clear reference to the legal form in the domain name creates confidence at first glance and simplifies the communication between the company and Internet users. You can be sure that you are dealing with a real company.

The .GMBH registry itself (the entity that maintains the authoritative record of all registrations for the TLD) decided to limit the TLD to this group of clients, following regulations of the Internet Corporation for Assigned Names and Numbers (ICANN) and the Government Advisory Committee (GAC), among others. The GAC represents governments and governmental institutions in ICANN’s multi-stakeholder model and takes on an advisory role for the community.

DOT: Can you tell us something about the cooperation between different stakeholders? Were there any disputes and how were they resolved?

HOFFMANN: In hindsight, all parties involved – no matter whether we are talking about the chamber of industry and commerce, GmbH companies, registrars or applicants – had the same core requirements of a domain extension for GmbH companies, even though the specific motivations might have differed. ICANN’s multi-stakeholder model supported all interest groups and certainly contributed to making it easier for some to participate and stand up for their interests. 

Basically, the focus is on Internet users and their expectations towards a website, i.e. the corresponding domain name. The domain extension allows a company, the registrant, to clearly identify itself as GmbH – much clearer than when using a .COM address, for example. In addition, it gives companies the opportunity to register their Internet address www.companyname.gmbh instead of companyname.de or companyname.com. This allows them to represent the whole company name in a short, catchy and self-explanatory domain. 

Over the course of the ICANN new gTLD program, the commercial regulating authorities of the respective countries have become advocates for securing the interests of Internet users. The authorities were of course also aiming to prevent the misuse of the GmbH legal form and to protect the credibility of companies. This could have been the case had domain registrations under .GMBH not been regulated adequately. Small and medium-sized businesses in Germany consist almost exclusively of GmbHs and make up the backbone of the national economy. Confidence in these companies has to be ensured.

The Internet users decide whether or not they trust a website and if they want to do business with a company. Of course, this does not only depend on the domain name, but also on the content and design of the site. However, the domain name is the first thing you see (in ads, search results, flyers etc.), making it an important figurehead.

Finally, the parties involved agreed on so-called “safeguards” for certain sensitive strings. Besides .GMBH, other company extensions such as .SRL and .LTD (both abbreviations stand for limited liability companies, “SRL” mostly in Italy and Spanish-speaking countries and “Ltd” in English-speaking countries) are included in this list. As a registrar, the link between registrant and registry, we are taking on an important role in implementing the “safeguards” and are well aware of this responsible task.

DOT: Talking about self regulation and self governance: what are your experiences in the industry, especially in terms of .GMBH?

HOFFMANN: The new gTLD program and the introduction of .GMBH is an excellent example of ICANN’s multi-stakeholder model and as such an example for self-regulation and self-governance. Everybody could submit suggestions and together they tried to find a common denominator.

Although this process has proven to be lengthy and sometimes difficult, we have still had good experiences. The safeguards we have already mentioned are one example of a constructive community effort, since this is not a rigid construct, but still gives the implementing parties the freedom to adjust the execution to their respective business models.

DOT: With your background, how would you improve Internet governance, especially in terms of the domain industry?

HOFFMANN: The biggest challenges in these processes have surely been the lengthiness and complexity of the domain subject as well as the language barrier. The disadvantage that comes with the multitude of different parties in a multi-stakeholder model is that decision-making processes take up relatively large amounts of time. From the beginning to the end, when a solution is finally found, there are many hearings of all parties. Bearing in mind that the work of the stakeholder groups is largely based on voluntary commitment. Particularly in this area there is definitely room for improvement, as it is getting constantly harder to find volunteers. The topic of domains and DNS can be very complex and technical. Support through guides or tutors could help facilitate the entry of newcomers into the business.

Another obstacle is certainly language. English as business language makes sense for stakeholders from all over the world. But when it comes to the details, it can be difficult for non-native speakers to get further involved. They feel intimidated and might be afraid or ashamed to embarrass themselves by having problems in understanding a topic entirely. It might help to create local working groups for certain topics and only translate the results into English or to have the results presented to the international peers by a team leader. This approach would also allow for more insight into local laws. Internet governance is still heavily influenced by a U.S. American point of view and sometimes neglects the cultural and legal differences in different countries. 

In addition, we should not let the influence of the different governments get out of hand. In particular, the community was successful in completing the IANA Stewardship Transition in 2016, meaning that the administration of the Internet is no longer in the hands of the U.S. government under the supervision of the National Telecommunications & Information Administration (NTIA).