U.S. FTC drops probe of Cisco 1998 meetings
biz.yahoo.com
WASHINGTON, June 1 (Reuters) - Cisco Systems Inc. (Nasdaq:CSCO - news), the premier maker of computer networking
gear, was cleared of wrongdoing in a limited antitrust probe by the Federal Trade Commission, Cisco officials said on Tuesday.
The agency's investigation, revealed by Cisco in October, focused on meetings last year between the San Jose, Calif., company
and two leading rivals, Lucent Technologies Inc. (NYSE:LU - news) and Canada's Northern Telecom Ltd. (Toronto:NTL.TO -
news)
"The routine inquiry by the FTC has ended," Cisco general counsel Dan Scheinman said in a telephone interview. "Cisco is a company that plays by the rules."
A spokeswoman for the FTC confirmed that the probe was closed.
Scheinman said the FTC notified the company last week that the investigation -- prompted by press reports of the 1998 meetings -- had ended. Cisco cooperated
fully, participating in one meeting with the FTC and turning over a few boxes of documents, he said.
While talks among rivals are not illegal, agreements among competitors to fix prices or split markets are prohibited under U.S. antitrust law.
The FTC keeps an eye out for companies that may be colluding to raise prices or divide turf.
For example, last February the FTC settled charges that Stone Container Corp. attempted to orchestrate an industry-wide price increase for linerboard, a
component of corrugated boxes. The charges were based on actions and public statements by Stone Container.
Cisco's meetings with Lucent and Nortel, major manufacturers of telecommunications networking equipment, came as Cisco was moving fast to enter the telecom
market.
Cisco held ''very preliminary'' talks with the two more established players about possibly creating an open technical standard to allow equipment from various
vendors to interact, Scheinman said.
''This is a real vindication for the open standards business, the open standards market,'' Scheinman said. ''It shows there really wasn't anything going on there.''
Shares of Cisco closed down $1.9375 to $107.0625 on the Nasdaq on Tuesday before news of the end of the probe was released. The company's share price lost
nearly 15 percent last year on the day it acknowledged the investigation.
Look for a rise in shares tomorrow?? The day CSCO announced the prob was the day we got slammed. Remember those days? :o)
Justin
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