Trade Association Alleges Illegal Activity by Cisco and Avaya

Posted by Converge Solutions Inc. on Friday 21st December 2012

The Association of Service and Computer Dealers International (ASCDI) has filed a complaint with the US Department of Justice requesting relief from alleged attempts by Cisco and Avaya to illegally monopolize the maintenance market for their products.

According to the trade association, both Cisco and Avaya have adopted policies of not providing customers with bug fixes and software patches unless the end users purchase hardware support agreements from the manufacturers. And if the customers opt to sign a support contract with someone other than the manufacturers, the software patches are denied.

"It is like Toyota saying that they will not download the software patch that fixes brake problems unless you sign a long term service agreement with them," said Joseph Marion who represents ASCDI. "And if you decide you want to have someone other than Toyota maintain your car, you can't get the patch at all!"

The Association has also filed complaints with the US Departments of Justice and Defense and the General Services Administration requesting relief from alleged attempts by Cisco to interfere with free and open competition for the sale of Cisco products to the Federal Government. The complaints allege that Cisco falsely represented that procurement rules had changed for Information Technology equipment requiring the Federal Government to buy Cisco products only from Cisco or its authorized agents. The procurement rules have not changed and there are no such requirements. In addition, the complaint alleges that Cisco improperly advised Federal contract buyers to engage in sole source procurement disregarding guidelines in direct violation of Federal procurement rules.

According to the Association, Cisco requires its Authorized Resellers to sell equipment to end-users only. Many times however, Authorized Resellers sell their new Cisco products to independent resellers who in turn sell these products as "new in the box" to the Federal Government and commercial buyers. Cisco is aware of these sales but it chooses to do nothing but complain and mislead. Cisco calls those products "grey" and is falsely telling Federal Government buyers that buying "grey" market products is illegal. By convincing contracting officers to disqualify used and grey market Cisco products, Cisco is increasing the cost of IT equipment to the Federal Government rather than letting the Federal Government purchase product at competitive prices.

"Since Cisco can't or won't control its own authorized resellers, it has decided to do what no manufacturer has ever done before by threatening and misleading the end users of CISCO hardware," said Mr. Marion.


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