URL shorteners and other websites ending in .ly could directly benefit the family of Libyan dictator Colonel Muammar al-Gaddafi, via the company that registers the Libyan country code top-level domain (ccTLD).
Web addresses ending in .ly are registered via the country's largest Internet service provider, Libya Telecoms & Technology - of which Muhammad Gaddafi, Colonel Gaddafi's eldest son, is chairman.
thinq_ contacted a spokesperson for Internet domain authority ICANN, who couldn't confirm precise financial arrangements concerning the registration and renewal of .ly domain names, but said it was "usual practice" for ccTLD registrars to receive a cut of registration and renewal fees.
LT&T also has the power to seize Libyan-registered .ly domains - as it did from Violet Blue, a US sex writer who in 2009 launched what she claimed was the first 'sex-positive' (read 'pro-porn) URL shortener, vb.ly. The site was held to have breached Islamic Sharia law.
In response to a query from one concerned user, URL shortening site http://bit.ly proclaimed that they "don't do business in Libya". Explaining that its registration had been handled by a California-based registrar, the site conveniently side-stepped the issue of whether Libya's current regime benefited from its registration and renewal fees, but added:
"It's worth noting that on May 31, 2006 the United States reopened the U.S. Embassy in Tripoli, a step the State Department described as marking 'a new era in U.S.-Libya relations'."
The Gaddafi regime has come under international pressure to step down as leader of Libya, since government forces began attempts to repress calls for democratic elections on 15th February. Pro-government troops are accused of causing large numbers of civilian deaths during the bombing of rebel stronghold Benghazi and other rebel-held cities in the east of the country.
If you're concerned about using .ly-registered URL shorteners, one enterprising opponent of the Gaddafi regime has created their own (Finnish-registered) URL shortener to use instead. Its address? http://gadaf.fi