Infosys sues Cognizant over alleged healthcare software monopoly
BENGALURU, INDIA — IT giants Infosys and Cognizant are in an intense legal battle as Infosys filed a lawsuit against Cognizant in a United States court, accusing it of anti-competitive practices in healthcare software.
The lawsuit alleges Cognizant used monopolistic tactics and employee poaching to stifle competition, but Cognizant strongly denies this.
Allegations of anti-competitive practices by Cognizant
Infosys has accused Cognizant of engaging in anti-competitive practices to maintain its dominance in the healthcare software sector.
The lawsuit alleges that Cognizant used restrictive non-disclosure agreements (NDAs), withheld training for key software products like QNXT and Facets, and reportedly implemented “most favored vendor” contracts to block competition.
Infosys also implied that Cognizant’s CEO, Ravi Kumar S, intentionally delayed Infosys Helix development prior to his departure from Infosys to Cognizant.
These actions, according to Infosys, amount to monopolistic behavior and an “unreasonable restraint of trade.” Cognizant denies these allegations, labeling them as “preposterous” and “absurd,” according to a Times of India report.
This legal battle reveals the ongoing competition between organizations seeking leadership within the healthcare information technology sector.
Talent poaching and leadership disputes
This issue also underscores a fierce talent war between the two IT giants. Infosys accused its competitor, Cognizant, of unprofessional hiring methods that poached employees, particularly after Ravi Kumar S became Cognizant’s CEO earlier in 2023.
Under his leadership, Cognizant recruited over 20 executives from Infosys at various positions, from executive vice president to senior vice president roles. Infosys claims that its workforce losses to rivals hindered strategic functions, which in turn caused vital project work, like Helix, to lag.
Similarly, Wipro has filed lawsuits against former executives who joined Cognizant, alleging breaches of non-compete clauses.
Intensifying competition and slowing market conditions have led IT giants to tighten their non-compete restrictions, thus restricting both staff movement and knowledge interchange.
Analysts view this legal drama as part of a larger struggle for market share and talent retention in the IT services sector, where attrition rates are rising.
As Cognizant and Infosys, two of the world’s leading BPO companies who ranked 7th and 11th among the OA500 list, an objective index of the world’s top 500 outsourcing companies, it is vital to closely monitor this legal battle over allegations of anti-competitive practices which could significantly impact the global outsourcing landscape.
