Infosys Accuses Rival Cognizant Of Anti-Competitive Practices, Poaching Key Talent

Infosys Ltd. accused Cognizant Technology Solutions Corp., its US-based rival, of adopting anti-competitive practices and poaching key talent. The Indian information technology major has pressed the charges in a suit filed before a Texas federal court.

The Bengaluru-based firm has alleged that Cognizant added clauses in contracts that restricted its clients from engaging with rivals for IT services work. The company further claimed that Cognizant refused to provide training to the clients on its software.

Infosys has also accused Cognizant of targeting its top talent, including S Ravi Kumar, who was tapped as its chief executive officer in 2023. The crossover of Kumar delayed the development of Infosys Helix, a competing software product of the company, as per the allegations.

This comes after Cognizant last year had sued rival Infosys, accusing the company of stealing trade secrets related to its healthcare insurance software. In the case, Cognizant claimed that Infosys had illegally taken data from its databases and exploited it to create and sell rival software. Infosys had then refuted the accusations and offered to defend itself in court.

Infosys is its counterclaim has now said, “Cognizant has engaged in various endeavours that stifle competition from more innovative and efficient rivals, like Infosys… Cognizant's monopolistic strategies include imposing restrictive contractual obligations with no legitimate purpose and barring Infosys from participating in training programs it was traditionally offered while continuing to make training available to others.” 

Both of these strategies are designed to make it more difficult for Infosys to compete against Cognizant in the IT services market. Further, Cognizant has also taken steps to obstruct and delay Infosys's ability to develop a competing software product by erecting barriers to entry and luring away all of the product's executive sponsors and incentivising them to stifle product development in the months leading up to their departures, the company notes. 

The IT major also accused Cognizant of poaching its top talent to stall the progress of its Helix platform. “Cognizant's anticompetitive scheme to stall Infosys Helix's launch included the targeted recruitment of key senior executives responsible for Infosys Helix, including Kumar, Shveta Arora and Ravi Kiran Kuchibhotla, and incentivising them to delay and obstruct the development and marketing of Infosys Helix in the months leading up to their departures,” the filing read. 

Drawing parallels, it highlighted that Ravi Kumar S., then-President of Infosys, initially championed Infosys Helix as a next-generation platform. However, by Spring 2022, he reduced support for the project, delaying its completion by 18 months. In October 2022, Kumar resigned from Infosys and was appointed CEO of Cognizant. 

Commenting on the development, Cognizant spokesperson in a statement said, "Cognizant 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, the spokesperson added.

(This is a developing story.)