Since 1993, Network Solutions Inc (NSI) has assigned and managed most of the world's Internet addresses, also known as domains.

The company denies that it has a monopoly position and argued that competition already exists.

The European Commission said the investigation is to determine whether the business agreements comply with EU rules on fair business competition.

The licensing agreements between NSI and the two Scandinavian companies involve Internet domains ending in .com, .org and .net.

Unfair competition?

The US is working to end NSI's monopoly and open the market for domain names.

EU Competition Commissioner Karel Van Miert wrote to the US Department of Commerce in support of the new non-profit organisation that the US has established to manage many of the technical details of the Internet, according to statement by the EU.

But, the Commission is concerned that NSI "does not perpetuate its monopoly" by locking distributors into licensing agreements during the transition to a more open market.

Since 1992, NSI has registered almost five million Internet addresses and co-ordinated the Internet's most important functions such as maintaining the master database of addresses.

The new non-profit organisation, the Internet Corporation for Assigned Names and Numbers, will now manage the Internet's domain name system and accredit new registrars to compete with NSI.

Battle at home

The company argues that it does not have a monopoly position.

NSI spokesman Christopher Clough said the company's registration service only offers the three top-level domains, .com, .org and .net addresses. They are only three of the 248 domains around that world.

Mr Clough also said that the company had come to an agreement with the US government to liberalise the market.

ICANN named five companies in April which will now compete with NSI for registration of the top level Internet domain names. Some 50 companies will be accredited as registrars by next year.

But while NSI has lost its lock on the market, it has refused to share its database of previously registered domains, sometimes referred to as the "who is" database.