Metaswitch Lawsuit: Ribbon Tried to ‘Kill’ Its Competitor

Metaswitch Networks has filed a federal antitrust lawsuit against Ribbon Communications, alleging it is “systematically eliminating” competition to raise prices for network operators.

The suit was filed in the U.S. District Court for the Southern District of New York. Metaswitch said it is Ribbon’s only significant remaining competitor in the United States and Canada that competes to “transform and modernize” landline telephone networks for VoIP in many communities. The lawsuit alleges that Ribbon has “aggressively consolidated the industry through serial acquisitions and is illegally using exclusionary and deceptive tactics to eliminate its last major competitor in the market.”

This is the latest litigation in what has been an ongoing legal battle between Metaswitch and Ribbon, with previous suits alleging patent infringement.

Ribbon declined to comment on the suit.

Last fall, Sonus Networks completed its merger with Genband, creating a $745 million company focused on next-generation communications networking, and rebranded as Ribbon.

Metaswitch’s Martin Lund

“This litigation seeks to ensure Americans’ access to desperately needed landline network upgrades, particularly in rural areas where cellular service can be less reliable,” said Martin Lund, Metaswitch’s CEO. “If left unchecked, Ribbon will be free to raise prices for more than 700 local network operators who will have no choice but to either slow down much-needed upgrades or to pass on the impact of increased costs to consumers.”

The complaint alleges that after Metaswitch refused to be acquired in 2013, Ribbon launched a campaign to “kill” its competitor by “asserting certain intellectual property rights in bad faith and in contravention of royalty-free licensing obligations, systematically maligning Metaswitch to customers with false and misleading information, and coercing customers to choose Ribbon instead of Metaswitch with anticompetitive pricing practices, among other things.”

“Blatant efforts to dominate a captive market and price gouge are exactly what the antitrust laws are designed to stop,” Lund said. “We are pursuing this case not just to protect Metaswitch, but because we believe Ribbon’s conduct is hindering customers’ ability to make fixed-line upgrades that could enhance the day-to-day lives of millions.”

The suit seeks triple damages from Ribbon for alleged violations of the Sherman Act, damages under the Lanham Act and various state statutes, as well as permanent injunctive relief. Metaswitch also is requesting a jury trial.

In August, Ribbon closed its $110 million acquisition of Edgewater Networks, a provider of network-edge orchestration for the SME and UC market. Ribbon said the acquisition will allow it to offer its global customer base a complete core-to-edge product portfolio, end-to-end service assurance and analytics offerings, and a fully integrated SD-WAN service.