Cisco faces probe on talks with rivals

Networking giant Cisco Systems is facing a US Federal Trade Commission (FTC) probe over claims that it tried to illegally carve up the market for networking technologies with its industry rivals.

According to US reports, Cisco was last week contacted by the FTC, requesting further information about talks it held last year with Lucent Technologies and Northern Telecom.

The FTC is concerned that these talks may have breached anti-trust laws that were drawn up to control the markets for emerging networking technologies.

While Cisco has acknowledged that it talked to the two telecommunications companies separately about possible partnerships, it said there was nothing secretive or anti-competitive about these discussions, insisting that the talks surrounded developing additional standards for technologies.

In a statement issued by Cisco last week, the company claimed the talks 'were openly discussed and well publicised over the past 12 months in several industry forums and many press reforms.

'We view this inquiry as a preliminary and routine matter. These discussions are not a review of Cisco business practices as a company, but instead a review of talks that ended more than six months ago.'

Cisco denied that it illegally tried to carve up the network market with counterparts in the industry, Northern Telecom and Lucent.

In fact, it suggested that the discussions with Nortel and Lucent were even pro-competitive because they were aimed at promoting common standards.

Lucent and Nortel confirmed that the FTC had contacted them about their dealings with Cisco, and said they were co-operating with the investigation.

The FTC had assured both companies that they were 'not the target' of the antitrust probe.

A representative for Lucent said the company had been talking with Cisco about possible partnerships since 1997. 'These discussions ended early this year, when it became clear that Cisco and Lucent were both interested in the same attractive spaces in the networking market,' he added.

The allegations against Cisco bear some resemblance to the Department of Justice's anti-trust lawsuit against Microsoft, in which it claims, among other things, that the software giant sought to divide up the browser market with competitor Netscape in 1995.

The FTC refused to comment on the on-going investigations.