Cisco has been in the news lately, albeit for all the wrong reasons. Once the world’s most valuable tech company in the world, Cisco used to be worth $500 billion. That’s now down to nearly $100 billion and questions continue to be asked over its lost credibility. Investor confidence has hit an all time low and employees seem confused.
And now the telecom giant is back in the news for having orchestrated the arrest of Multiven founder Peter Alfred-Adekeye last year in order to force a settlement of Multiven’s antitrust lawsuit against Cisco. A former Cisco engineer, he was arrested for allegedly hacking into the Cisco’s network. His lawyers say U.S. prosecutors and Cisco misled the Canadian government and B.C. courts into invoking emergency extradition powers to jail Peter Adekeye.
The curious case of Peter Adekeye isn’t just about an individual taking revenge on his ex-employer and vice-versa, it’s might well turn out to be a showdown between the U.S. prosecutors and the Canadian judiciary. Moreover, it raises crucial questions over the “trust” between a manufacturer and the VAR community.
So, who is Peter Adekeye and why he’s ended up on the receiving end from Cisco? Peter Adekeye used to work for Cisco until he left the company in 2005 to set up two networking companies. His first venture, Multiven, sued Cisco in December 2008, alleging the latter forced network equipment owners to buy its SMARTnet service contracts, thereby monopolizing the business of servicing and maintaining Cisco enterprise equipment. Cisco was quick to return the pleasantries and it sued Alfred-Adekeye and Pingsta — another company he founded.
In May 2010, Peter Adekeye was arrested in Vancouver, Canada on 97 counts of hacking. Cisco says Adekeye did this by using a Cisco employee’s user ID and password to download software and access Cisco’s restricted website. If found guilty, he could be sentenced to 10 years in prison and a US$250,000 fine. Adekeye was subsequently released on bail, but he has not been able to leave Canada since then. The case has made no progress for the past 10 months because the U.S. Attorney’s office has not been able to present the evidence required to extradite Alfred-Adekeye.
His lawyers claim false material was used by Cisco and U.S. prosecutor to dupe Canadian courts. They allege his arrest was orchestrated by Cisco as part of an “aggressive” litigation strategy and Cisco has hidden key facts from the Canadian judiciary. It’s reported that Adekeye even wrote to U.S. President Barack Obama, seeking his intervention but I’m guessing the world’s most powerful man has more important business matters to attend. Cisco declined to comment saying the extradition is a matter between the two governments.
Needless to say, I’m concerned by the broader implications of the growing number of such incidents in the telecom industry. I’m not a legal expert but does Cisco’s policy to push updates and bug fixes to SMARTnet customers, and not to third parties, count as a monopolistic practice? After all, every company does it in some way or the other. Either way, Cisco subsequently settled the lawsuit with both his companies. Time will tell if Cisco can prove Adekeye to be guilty of hacking.
Some people are equating the VAR hacker prosecution to be equivalent to persecution of a competitor. Others believe Cisco wants to teach Adekeye a lesson and set a zero tolerance precedent for existing and ex-VARs. Adekeye’s lawyers say
“Canada was misled; the courts were misled.”
What do you think? Now is the time for the VAR community to stand up and have their say. Please share your opinion by leaving a comment below this post.