Cisco Accused Of Monopoly In Antitrust Lawsuit


Cisco Systems is the target of an antitrust lawsuit that accuses the vendor of holding a maintenance services monopoly for its networking equipment.

Multiven, a Redwood City, Calif.-based company that provides network maintenance and consulting services, filed the lawsuit Tuesday in the U.S. District Court in San Jose, Calif., where Cisco is based.

In the suit, Multiven alleges that Cisco harmed it and consumers by requiring customers to buy Cisco Smartnet maintenance services in order to receive bug fixes, patches and updates. The suit alleges that Cisco's practices prevent competitors such as Multiven from servicing Cisco networking equipment, according to a statement from Multiven.

Cisco's actions had "monopolistic, anticompetitive and injurious effects in the marketplace for network services," Mutiven alleges in the statement. Multiven accuses Cisco of suppressing competition for service and maintenance of its networking equipment, depriving customers of choice by forcing them to purchase Cisco Smartnet and harming consumers by maintaining "supracompetitive prices" for services of "reduced and constrained" quantity, quality and variety, according to Multiven's statement.

Cisco disputes Multiven's claims, plans to "vigorously defend" itself and is "confident that we will prevail in the matter," according to a Cisco statement provided to ChannelWeb.

"Cisco customers are in no way required to purchase services from Cisco. There are thousands of partners who offer service programs for Cisco products, including bug fixes," Cisco said in the statement. "Additionally, customers who purchase Smartnet from Cisco routinely rate Cisco's postsales support and access to our technical assistance centers (TACs) as among the best support offerings in the IT industry."

Cisco in the statement said its Smartnet policies are "consistent with industry practices for making bug fixes available."

Multiven in its statement did not specify the damages or remedies it is seeking via the lawsuit, but said that its "requested remedies are intended to give consumers greater freedom and flexibility, while at the same time ensuring that the network maintenance services marketplace develops into an open and competitive industry."

The antitrust lawsuit isn't the first legal scuffle for Cisco this year. In October, a jury found that Cisco violated its reseller agreement and deal-registration agreement with Infra-Comm and awarded the San Juan Capistrano, Calif.-based solution provider more than $6 million in damages.