Cognizant acted with anticompetitive malice, alleges Infosys in counterclaim filed in US court

BENGALURU: IT services company Infosys has alleged that US-based Cognizant has acted with anticompetitive malice aimed at stifling competition from the company.

In its 50-page counterclaim filed in the Northern District of Texas against Cognizant, the Bengaluru-based firm claimed that Cognizant is so fearful of legitimate competition from Infosys that it has resorted to "draconian measures to prevent that competition".

It also accused Cognizant CEO Ravi Kumar of misusing confidential information. "Cognizant has artificially raised entry barriers through its exclusionary NDAA (Non-Disclosure and Access Agreement) provisions and engaged in gross impropriety by using its power to encourage employee disloyalty at Infosys and obtain its competitively sensitive information," the lawsuit claimed. Infosys has requested for a jury trial.

This counterclaim is a response to the August 2024 lawsuit filed by TriZetto, Cognizant's subsidiary. Cognizant had accused Infosys of stealing trade secrets related to healthcare insurance software.

Cognizant had acquired TriZetto, which is in the healthcare space, in 2014. "Cognizant began weaponizing the newfound power it gained through its acquisition of TriZetto’s payor software products, taking decisive steps to make it harder for more efficient rivals like Infosys to compete head-to-head with Cognizant," the lawsuit filed by Infosys stated.

In order to challenge Cognizant's dominance in the healthcare payor software market, Infosys in 2019 came up with Helix, a payor software platform.

Ravi Kumar was the primary executive sponsor of Infosys Helix as he was then with the Bengaluru-based firm. "Kumar had championed Infosys Helix from his senior position at Infosys. But Kumar’s optimism and excitement for the Infosys Helix product suddenly changed in Spring 2022. He began to pull back support of Infosys Helix, declining requests for needed resources, which delayed the completion of Infosys Helix by at least 18 months," the lawsuit further said.

In October 2022, Kumar resigned from Infosys, and later joined as Cognizant CEO.

"In addition to recruiting away Infosys leadership, Cognizant is attempting to prevent Infosys from replacing payors’ non-Cognizant software with Infosys Helix by raising artificial barriers to interoperability with Cognizant products," it said.

Kumar, during his tenure in Infosys, appointed Shveta Arora, Senior VP, Global Head of Consulting, as a co-executive sponsor for Infosys Helix. Kumar also relied heavily on Ravi Kiran Kuchibhotla, Senior VP and Head of Strategy, who actively supported Infosys Helix, coordinating service lines and staffing.

Both Arora and Kuchibhotla joined Cognizant in 2023 and 2024, respectively.

Infosys also alleged that the anticompetitive scheme is causing significant financial harm to the company.

When asked about the counterclaim, Cognizant in a statement to TNIE said it is committed to upholding the highest standards of integrity in all business operations and will take decisive action to address any allegations that compromise competitive standing.

“Cognizant encourages competition, but competitors cannot use Cognizant's IP to unfairly compete, as Infosys has done. Cognizant's software products are widely used in the marketplace for being best-in-class and most preferred among customers,” it added in a statement.