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Commission Closes Check Point Probe

The Israeli data security corporation Check Point Software Technologies Ltd. has agreed to an undertaking restricting its business practices after Finnish rival Stonesoft Corporation lodged a complaint against it to the European Commission in June 2001.

The complaint stated that Check Point was abusing its dominant market position by informing some of its distributors and resellers that if they attempt to sell Stonesoft's competing firewall/VPN (virtue private network) product, Check Point would no longer allow them to carry its products.

Check Point is one of the world's main players in selling firewall and VPN software that protects corporate networks from hacking. Given its position, the Commission was concerned that this practice would have a negative impact on the market for firewall/VPN software. In addition, such practices violate the European Union (EU) competition rules.

Following the negotiations between the Commission and Check Point, Check Point has agreed to provide a formal undertaking to the Commission. The terms of the undertaking are as follows.

First, Check Point will not place undue or unacceptable pressure upon its distributors and resellers regarding their independent decision whether or not to sell competing products. This will be supported in a written letter of which a copy of it would be sent to Stonesoft.

Second, Check Point will ensure that its sales and other relevant personnel are informed about the EU competition rules and that they understand the requirement to comply with those laws in their business dealings.

"We are pleased with the outcome of the extensive investigations made and the strong and active role the European Commission took in achieving this settlement. From our point of view, this was the fastest and the most effective way to ensure free and healthy competition in the market. For our partners and customers, this undertaking now offers a possibility to freely select new innovative products", said Esa Korvenmaa, CEO of Stonesoft.

As a result of Check Point's undertaking, Stonesoft has agreed to withdraw its complaint and the case is now closed. However, the Commission will continue to monitor developments in this market in order to ensure that the terms of the undertaking are respected.